LT Group profit shrinks to P2.16B in H1

MANILA, Philippines - The weak performance of the banking, tobacco, property and liquor businesses dragged the first half profit of tycoon Lucio Tan’s LT Group Inc.

In a regulatory filing, LT Group said its net income slumped 69 percent to P2.16 billion from P6.95 billion “as challenges continue to weigh down on its various businesses.”

Philippine National Bank (PNB) accounted for 48 percent or P1.03 billion of total earnings, followed by the tobacco business at 33 percent or P720 million, Asia Brewery Inc. (ABI) at 29 percent or P628 million, and Eton Properties at two percent or P38 million. But liquor unit Tanduay Distillers Inc. posted a P172-million net loss in the first half.

In particular, PNB’s net income sank by half to P3.12 billion from P6.03 billion a year ago due to higher trading gains last year. In the first half last year, PNB booked P7.97 billion in trading gains, substantially higher than the P1.96 billion in the first half this year.

LT Group’s income from the tobacco business slipped 72 percent to P720 million from P2.61 billion in the first half.

“PMFTC Inc. continues to be adversely affected by the illicit trade in cigarettes,” LT Group said. PMFTC is the company behind cigarette brands Marlboro, Philip Morris, Hope, Fortune and Champion.

Beverage maker ABI said its net income rose 30 percent to P629 million from P483 million a year ago.

“ABI’s brands Cobra carbonated energy drink, and Absolute and Summit water continue to be market leaders. Tanduay Ice has over 90 percent of the alcopop market,” LT Group said.

Real estate unit Eton Properties reported a net income of P38 million in the firs semester as leasing revenues were higher with the start of the contribution of Centris Cyberpod Three, the latest business process outsourcing office building at Eton Centris in Quezon City.

For Tanduay, sales volume increased in the first half amid intensified marketing efforts for flagship product Tanduay Five Years and contribution from the Compañero brandy blend.

“However, due to higher raw material costs, coupled with higher selling and marketing expenses, the company reported a loss of P172 million for the first half,” LT Group said.