LT Group profit tumbles 61%

MANILA, Philippines - Lucio Tan-led conglomerate LT Group Inc. said it was weighed down by the weakness of its banking, tobacco, property and liquor businesses in the first quarter as its net income sank 61 percent to P1.61 billion from P4.14 billion in the same period last year.

Philippine National Bank (PNB) accounted for 46 percent or P748 million of total earnings, followed by the tobacco business at 36 percent or P576 million, Asia Brewery Inc. (ABI) at 16 percent or P263 million and Eton Properties at P29 million. Liquor unit Tanduay Distillers Inc. posted a net loss in the first quarter.

Tan’s investment holding  firm said its balance sheet remained strong, with the parent company’s cash balance at P17 billion as of end-March 2014.

In particular, PNB’s net income slipped 65 percent to P1.35 billion in the first quarter from last year’s P3.85 billion.

“This is largely due to lower trading gains this year. In first quarter 2013, PNB booked P4.7 billion in trading gains, substantially higher than the P582 million realized in the first quarter of  2014,” LT Group said.

Moving forward, PNB said it is poised to grow the consumer loan business, with PNB Savings Bank targeting to open more than 20 branches this year. PNB raised P11.6 billion from a stock rights offering in February.

For the tobacco business, PMFTC Inc. reported a net income of P576 million, down 63 percent from P1.56 billion a year ago.

LT Group said equity in net earnings from its 49.6 percent stake in PMFTC hit P480 million, dropping 69 percent from P1.09 billion as it “continues to be adversely affected by the illicit trade in cigarettes.”

PMFTC, whose sales volume climbed 20 percent to 16.2 billion sticks in the first quarter, said it was also hit by another round of increase in the excise tax. PMFTC is the company behind cigarette brands Marlboro, Philip Morris, Hope, Fortune and Champion.

Beverage maker ABI said its net income rose 15 percent to P263 million from P229 million reported a year ago.