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LT Group income up 4.5% to P6.49 billion in Q1

Iris Gonzales (The Philippine Star) - May 12, 2021 - 12:00am

MANILA, Philippines — LT Group Inc. (LTG), Lucio Tan’s listed holding company, reported a first quarter net income of P6.49 billion, up 4.5 percent from P6.21 billion a year ago.

LTG’s businesses are banking through Philippine National Bank, tobacco through PMFTC, liquor through Tanduay Distillers, property through Eton Properties Philippines and beverage through Asia Brewery Inc. (ABI).

Of the different business segments, the tobacco business accounted for P5.01 billion or 77 percent of the total attributable net income, followed by PNB which contributed P1.02 billion or 16 percent of total attributable net income.

TDI added P233 million or four percent while ABI contributed P211 million or three percent.

Property arm Eton accounted for P149 million or two percent while the group’s 30.9 percent stake in Victorias Milling Company Inc. added P66 million or one percent.

The tobacco business, through PMFTC, posted a net income of P5.03 billion, up P24 million from last year’s P5.01 billion.

This was despite the industry posting lower volume at 13.1 billion sticks. This marked a 14 percent drop from the 15.3 billion sticks a year ago due to price increases to pass on the additional excise taxes.

LTG said the tobacco industry continues to experience illicit activities.

“In the first quarter, there were 39 enforcements, compared to 26 a year ago. This was even after illicit activities increased significantly in 2020 with 161 machines seized from illegal factories, double the 82 machines seized in 2019,” it said.

Another challenge for the industry is taxes.

On July 25, 2019, President Duterte signed Republic Act (RA) 11346 which increased the excise tax on tobacco starting January 2020. From P35 per pack in 2019, it increased to P45 per pack in 2020 and P50 in 2021. It will increase by P5 per pack annually in 2022 and 2023, then increase by five percent annually thereafter.

“LTG is not against tax increases, but believes that the hikes should be moderate. Continued price hikes to pass on higher excise taxes may result in further volume declines,” it said.

PNB’s net income under the pooling method was P1.83 billion, 33 percent higher than last year.

TDI’s net income during the period was P235 million, up 18 percent due to the five percent increase in the volume of liquor sales and higher rectified alcohol sales.

ABI posted a net income of P211 million, 185 percent more than the previous yea due to the absence of losses from the AB Heineken joint venture.

However, revenues declined by13 percent due to lower volume of bottled water and soy milk.

LT GROUP INC.
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