Tan’s LT Group income slides 9% in 2020

LT Group, Inc. (LTG) reported a 9% drop in its attributable net income to P21 billion in 2020, with its tobacco business contributing three-fourths of the total.

In a statement, Lucio C. Tan’s listed holding company said its tobacco business accounted for 80% or P16.83 billion of the total attributable income, nearly 8% up from the previous year.

“The higher income is attributed to the higher share of premium Malboro with customers shifting from mid priced Fortune, as well as the price increases to pass on higher excise taxes,” LTG said.

The tobacco business remained strong despite the industry’s volume declining by 12% due to the additional excise taxes and the strict lockdown measures.

Banking unit Philippine National Bank (PNB) contributed P1.55 billion or 7% to LTG’s net attributable income. This is 72% lower than its 2019 contribution of P5.57 billion.

Under the pooling method, PNB’s net income for the year amounted to P2.8 billion, plunging 72% from the P9.94 billion posted in 2019.

PNB set a P16.9-billion provision for credit losses booked in 2020, nearly six times higher than the P2.9 billion allotted for provisions in the previous year, because of the impact of the pandemic on the economy.

Tanduay Distillers, Inc. (TDI), meanwhile, accounted for P1.1 billion or 5% of LTG’s net attributable income for 2020, nearly 65% higher than its P667 million contribution seen in the previous year.

“Revenues from liquor were 33% higher with the higher volume and higher prices to pass on the additional excise taxes. Revenues from bioethanol were 24% lower with the lower volume and lower average selling price,” LTG said without providing specific figures.

TDI finished the year with a nationwide distilled spirits market share of 22.5%, higher than the 27.8% share in 2019.

Eton Properties Philippines, Inc. contributed P799 million or 4% to LTG’s net attributable income, down by 11% from the previous year. Eton’s net income slumped 11% to P802 million in 2020.

Asia Brewery, Inc. (ABI) accounted for P583 million or 3% of LTG’s net attributable income, up by 46% from the previous year.

Its net income amounted to P591 million, which the company said is “largely due to the absence of losses incurred for the joint venture with Heineken as it transitions to the engagement of ABI to brew and distribute Heineken and Tiger beers in the Philippines.”

“LTG’s balance sheet remains strong,” the company said. “Debt-to-equity ratio was at 4.30:1 with [PNB], and at 0.16:1 without [PNB].” — Keren Concepcion G. Valmonte

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