LT Group Inc. (LTG), the holding firm of most businesses of tycoon Lucio Tan, on Wednesday said its attributable net income in the first semester fell 63 percent to P3.73 billion from last year’s P10.03 billion.
The company said the fall was mainly due to the higher provisioning for credit losses booked by its banking subsidiary, Philippine National Bank (PNB), and the elimination of the gain from the transfer of real estate assets at the consolidated level.
The tobacco business accounted for P8.97 billion of total attributable income, while PNB had a negative net contribution of P6.46 billion after eliminating its huge gains from the transfer of properties to its unit.
Liquor maker Tanduay Distillers Inc. added P602 million, beer and beverage firm Asia Brewery Inc. contributed P343 million while property developer Eton Properties Philippines Inc. accounted for P287 million. The company’s 30.9-percent stake in Victorias Milling Company Inc. added P169 million.
Net expenses and other income at the parent level amounted to P185 million, the company said.
Lender PNB reported a net income of P22.2 billion under the pooling method, inclusive of a P33.6-billion gain from the transfer of some properties into PNB Holdings Corp. At the consolidated LTG level, however, these gains were not recognized, which together with higher provisioning for credit losses resulted in a P6.46-billion loss contribution from PNB to LTG.
The tobacco business, under PMFTC Inc., had a net income of P9.01 billion in the first half, some 10 percent more than last year’s P8.21 billion.
The industry’s volume was estimated at 26.8 billion sticks for the period, 9 percent lower than last year’s 29.5 billion sticks. This is due to the October to November 2020 price increases to pass on the additional excise taxes.
“Illicit activities have also been rising, which include smuggled and locally produced products,” the company said. Tanduay’s net income for the first semester reached P605 million, 11 percent higher than last year’s P543 million. The higher income is largely due to the 13-percent increase in the volume of liquor sales and 55 percent growth in bioethanol sales.
As of end-June, the company’s nationwide market share for distilled spirits was at 26.9 percent, compared to last year’s 24.1 percent. In the Visayas and Mindanao regions where most of its sales are generated, market share was at 68.2 percent and 79.5 percent, respectively, compared to 62.4 percent and 72 percent, respectively, last year.
Asia Brewery’s net income for the period was at P343 million, an improvement from a mere P40 million it reported last year. The higher income was due to the absence of any losses from the AB Heineken joint venture as the partnership transitions starting 2021 to the engagement of the company to brew and distribute Heineken and Tiger beers in the Philippines.
Revenues were relatively flat as the lower volume of bottled water and soymilk were offset by higher volume from Cobra Energy Drink with a market share of 65 percent. Vitamilk maintained its leadership with a market share of 70 percent, while bottled water brands, Absolute and Summit, accounted for the second-largest share in this segment at 23 percent.
Eton’s net income was at P288 million for the period, 29 percent lower than last year’s P404 million, due to the decline in residential unit sales and lower leasing income.
Projects in the pipeline include Blakes Tower, a 36-storey office and residential building in Makati City which will have 11,400 square meters of office space and 14,000 square meters of residential space once completed. Also, Eton City Square 1, the 4.3-hectare neighborhood retail and commercial center in Sta. Rosa, Laguna will add 7,200 square meters of gross leasable area to Eton’s commercial leasing portfolio in phase 1.
Eton currently has a leasing portfolio of around 181,000 square meters of office space and over 45,000 square meters of retail space.