LT Group quarterly profit slips on higher borrowing costs

LT GROUP, INC. (LTG), the holding company of taipan Lucio C. Tan, Sr., reported a 21% decline in attributable net income for the second quarter due to higher finance costs from loans.

The company submitted a regulatory filing on Tuesday which showed its net income attributable to equity holders stood at P3.81 billion, down from P4.82 billion in the same three-month period last year.

Its consolidated revenues dipped 6% to P22.04 billion, but the bottom line was dragged lower by the 64% surge in finance costs, which stood at P102.13 million at the end of the period.

On a year-to-date basis, however, LTG’s attributable net income grew 9% to P10.03 billion, and consolidated revenues increased 4% to P47.26 billion.

The improvement was linked to better operating results from its tobacco, distilled spirits and property development segments, outpacing the drop in its banking and beverage segments.

The tobacco business posted a net income of P8.22 billion, up 40% due to a price increase rolled out in August 2019. This offset the 17% decline in volume as an effect of the quarantine that started in mid-March.

Income from the banking unit, through Philippine National Bank, dropped 64% to P1.44 billion. It attributed the decline to some P8.44 billion in provisions for credit losses, which it booked as a result of the coronavirus crisis.

The sprits business, through Tanduay Distillers, Inc., generated a P543-million net income, growing 43% from last year. It said the improvement is due to better margins in the liquor segment and a 41% decline in selling and marketing expenses.

Eton Properties Philippines, Inc. posted a 9% income growth to P404 million, which can be linked to higher rental income from the expansion of its leasing portfolio.

Better performances from the other segments offset the decline in Asia Brewery, Inc. The beverage unit added P40 million in net income, slumping 84% due to the effect of the quarantine to sari-sari stores and supermarkets.

LTG’s 30.9% stake in Victorias Milling Co., Inc. contributed P148 million in its attributable income, or about 1% of the pie.

“LTG’s balance sheet remains strong. Debt-to-equity ratio was at 3.81:1 with the bank, and at 0.18:1 without the bank,” the company said in a statement.

Shares in LTG at the stock exchange shed three centavos or 0.39% to close at P7.70 each on Tuesday. — Denise A. Valdez