LT GROUP, Inc. (LTG) more than doubled its attributable profit during the second quarter of 2018, driven primarily by its banking unit’s sale of acquired properties alongside the stabilization of its tobacco business.
In a regulatory filing, the holding firm of tycoon Lucio C. Tan, Sr. said net income attributable to the parent hit P5.33 billion in the second quarter, 133% higher than the P2.28 billion it realized in the same period a year ago. Revenues expanded by 14% to P18.4 billion in the same period a year ago.
This pushed LTG’s attributable profit by 97% to P8.96 billion during the first half, versus the P4.53 billion recorded in the same period in 2017. This came on the back of a 13% increase in revenues to P35.56 billion.
“The income for 2018 was boosted by the gain booked by PNB (Philippine National Bank) for the sale of Real and Other Properties Acquired (ROPA). Moreover, earnings from the tobacco business is normalizing as the Government’s efforts to curb the illicit trade has enabled the Company to operate in a level playing field,” the company said.
LTG’s tobacco business accounted for bulk of the company’s attributable profit for the first semester at 54% or P4.86 billion, followed by PNB which provided 35% or P3.08 billion. Tanduay Distillers, Inc. (TDI) delivered P437 million, while property business Eton Properties Philippines, Inc. added P212 million and Victorias Milling Company, Inc. with P115 million.
Earnings of PNB more than doubled to P5.51 billion in the first semester, versus the P2.75 billion it booked in the same period a year ago. This was due to a net gain amounting to P2.9 billion from the sale of ROPA.
Without ROPA sales, PNB’s net income would have ended flat at P2.61 billion.
The tobacco business under Philip Morris Phils. Mfg., Inc. and Fortune Tobacco Corp. (PMFTC) generated a P4.88-billion profit in the first half. Equity in net earnings stood at P4.72 billion from the conglomerate’s 49.6% stake in PMFTC.
The company cited a four percent drop in total volumes for the tobacco industry to 34.3 billion due to excise tax driven price increases. Volumes are projected to continue slowing down as more price increases are implemented.
LTG noted, however, it benefited from better pricing for the period, saying it can now pass on increases in excise taxes to customers given the government’s campaign drive against illicit trade.
“The company hopes that the Government continues on its actions versus the illicit trade, which include smuggled and locally produced products,” LTG added.
TDI generated 29% higher earnings to P437 million in the first half, following a seven percent increase in revenues to P8.86 billion. The company observed a four percent increase in liquor volumes, coupled by higher selling prices due to the increase in excise taxes.
Meanwhile, Asia Brewery, Inc. posted lower net income for the first half, down 46% to P218 million, taking a hit from increased costs due to a rise in sugar taxes and the weaker peso. The company implemented a P2 increase for its 240ml returnable glass bottle of Cobra to pass on taxes for sugary drinks, prompting lower volumes.
Eton Properties’ net income went up by 22% to P212 million, lifted by revenues which climbed nine percent to P1.21 billion. The company recorded higher leasing revenues and sales from residential units for the period.
Shares in LTG went up by 1.04% or 18 centavos to close at P17.46 each at the stock exchange on Monday. — Arra B. Francia