La Tondeña net income up 36% to P411M in Q1

La Tondeña Distillers Inc. (LTDI), the liquor arm of the San Miguel Group, said its net income reached P411 million in the first three months of 2002, a record-breaking growth of 36 percent over last year’s comparative figure.

In a report to the Philippine Stock Exchange, LTDI said the growth was impressive since it excludes the water and juice businesses which were sold late last year to sister company Coca-Cola Bottlers Philippines Inc.

LTDI owned the Sugarland juice line as well as the bottled water brands Viva!, First and Wilkins until a top-level realignment saw these hires being transferred to CCBPI in a move to consolidate the groups juice and water businesses with its carbonated drink products.

For the first quarter this year, the group had consolidated revenues of P2.6 billion, slightly below last year’s P2.7 billion as the company deliberately directed its efforts to bring down receivables and trade inventory levels, but the implementation of an aggressive fixed cost containment initiative boosted its operating income by four percent to P685 million.

The company remains hinged on its flagship product Ginebra San Miguel, supported by other liquor brands such as Añejo Rum, Tondeña Manila Rhum, Oxford London Dry Gin, Vino Kulafu, and San Miguel Bravo Rhum.

With the improved earnings, the company said it would buy back up to 10 percent of its total outstanding shares from the market, aimed at optimizing its capital structure and enhancing earnings per share.

LTDI has over 321.48 million in outstanding shares listed at the PSE. Yesterday, its stock was among the five biggest gainers, rising P2.25 or 10 percent to close at P24.75 each.

The company said its shares have been trading at a discount since the disposal of the water and juice businesses and management believes that "this is the opportune time to accumulate its own shares with its excess liquidity and strong cash flows from the first quarter results."

"The proceeds from the sale of our water and juice business combined with the strong internal cash generation from operations provided us more liquidity than we need at the moment," LTDI president Arnaldo Africa said.

"The best way to channel this liquidity amid a very low interest rate on funds is to buy back our shares. With the strength of our market franchise, the consistency of our performance and the prospects for sustained growth, we feel that our shares are significantly undervalued," he added.