LT Group Inc. (LTG) has allotted P9.7 billion in capital expenditures this year, a chunk of which will be earmarked for the digitalization of its banking unit and for its projects that were halted last year due to the lockdowns.
This year’s capex is almost double than the previous year’s P5 billion, according to the holding firm of most businesses of tycoon Lucio Tan.
Lender Philippine National Bank will have almost half of this year’s budget at P4.6 billion; Eton Properties Philippines Inc., P2 billion; liquor firm Tanduay Distillers Inc., P1.5 billion; the joint venture between Eton and Ayala Land Inc., P1 billion; and beverage firm Asia Brewery Inc., P700 million.
“This year will still be a tough one, but hopefully better than 2020. Vaccination is a crucial step towards the path to normalcy. It is crucial for opening up the economy. While we may not entirely and immediately get back our old life, it is an important step to get back some of what we once had,” Michael G. Tan, the company’s president and COO, said.
He said LTG has secured vaccines to cover all of its employees and service providers of the company, and has also provided access to these vaccines for their families.
Tan said the gradual opening-up of the economy in 2021 should bode well for all businesses in general. LTG said it expects the demand for consumer goods, particularly for the products of Tanduay and Asia Brewery, to show some volume growth or at least remain steady.
“But the volume of PMFTC Inc.’s products might still be impacted, as price increases are needed to pass on the annual increase in excise taxes, the last of which was in October 2020. Philippine National Bank will see some more NPLs [non performing loans] booked as Bayanihan 1 and 2 that provided a grace period for borrowers ended in 2020, but a better economy should pave the way for the need for more loans,” he said.
PMFTC is the combined company of Philip Morris Philippines Inc. and Tan’s Fortune Tobacco Inc.
Property developer Eton, with most of its leasing portfolio in office space, will not be as affected as other developers who are more reliant on retail space.
LTG said its attributable income last year fell 9 percent to P21.02 billion from the previous year’s P23.12 billion.
The tobacco business accounted for P16.83 billion or 80 percent of its income, followed by lender Philippine National Bank which contributed P1.55 billion or 7 percent to the income, liquor firm Tanduay Distillers Inc. contributed P1.1 billion or 5 percent, Eton Properties Philippines Inc. accounted for P799 million or 4 percent, while Asia Brewery Inc. contributed P583 million or 3 percent.
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