Tan’s LT Group earmarks nearly P10B for capex
By Keren Concepcion G. Valmonte
LUCIO C. Tan’s LT Group, Inc. (LTG) is allocating P9.7 billion for capital expenditures (capex) this year, nearly double the previous year’s P5-billion budget as the company expects the slow opening of the economy to “bode well for all businesses in general.”
The listed holding firm is formed by Tanduay Distillers, Inc. (TDI), Asia Brewery, Inc. (ABI), Fortune Tobacco Corp., PMFTC, Inc., Eton Properties Philippines, Inc., Philippine National Bank (PNB), and Victorias Milling Co., Inc.
Nearly half or P4.6 billion of the company’s capex will be allocated for PNB’s digitalization efforts.
During the company’s annual stockholders’ meeting, LTG President and Chief Operating Officer Michael G. Tan said the group’s banking segment is expecting to see more nonperforming loans as the grace period given to borrowers ended in 2020.
“A better economy should pave the way for the need for more loans,” Mr. Tan said.
Meanwhile, the company does not expect its property firm to be as affected compared with other real estate developers since it has more office spaces in its leasing portfolio.
LT Group has increased its capex allocation to P2 billion for Eton Properties after construction was halted last year due to pandemic restrictions.
The company also set some P1 billion for ALI Eton Property Development Corp., its joint venture firm with Ayala Land, Inc.
“We expect the demand for our consumer goods, those of TDI and ABI to show some volume growth or at least remain steady,” Mr. Tan said.
LTG earmarked around P1.5 billion of its capex for TDI and around P700 million for ABI.
“But the volume of PMFTC’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,” Mr. Tan said.
LTG also said it was able to secure enough vaccines for over 54,000 of its employees and service providers, as well as for their families.
On Wednesday, LTG shares at the stock exchange went down by 1.36% or P0.18 to close at P13.10 apiece.
