MANILA, Philippines - Earnings of taipan Lucio Tan’s holding firm LT Group Inc. plunged by more than half in the first three quarters of the year, dragged down by its banking and tobacco businesses.
LTG said its net income fell 67 percent to P2.5 billion in the first nine months of the year compared to P7.6 billion a year ago.
The company attributed the decline to the “difficult operating environment of its various businesses.”
Philippine National Bank, for one, saw its profits drop 46 percent to P3.7 billion in the nine-month period from P6.8 billion during the same period last year.
LTG said the nearly-half decline in PNB’s net income is largely due to higher trading gains last year.
“In 2013, PNB booked P7.6 billion in trading gains, substantially higher than the P1.2 billion realized in 2014,” it said.
LTG’s income from the tobacco business, meanwhile, stood at P462 million for the first nine months of 2014, a big dip from the P2.8 billion recorded last year as Philip Morris Fortune Tobacco Corp. continued to be adversely affected by illicit trade in cigarettes.
“The Bureau of Customs (BoC) has taken action by closing down the customs bonded warehouse of a competitor and assessed it for custom duties of over P1 billion. As the assessment only covers 2013 imports, the BoC continues to review the company’s importations for the past three years,” the company said.
Liquor unit Tanduay Distillers Inc. also reported a net loss of P83 million due to higher raw material costs, coupled with higher selling and marketing expenses.
Providing a positive light for the LT Group was Asia Brewery Inc. (ABI) which posted a net income of P797 million in the first nine months of the year, 27 percent higher than the precious year’s P626 million.
LTG said ABI’s brands such as Cobra (carbonated energy drink), and Absolute and Summit (water) continued to be market leaders in their respective categories. Tanduay Ice also captured over 90 percent of the “alcopop” market.
PNB’s attributable net income contribution to LTG was the highest for the January to September period, amounting to P1.3 billion or 52 percent of the group’s total.
ABI contributed P796 million or 32 percent, followed by the tobacco business at P462 million or 19 percent.
Eton Properties added P65 million or three percent while Tanduay incurred an P83-million loss.