Lucio Tan Group reports P4.71-B profit in 3 quarters

Lucio Tan Group Inc. (LTG) reported that its attributable net income for the first nine months of 2015 reached P4.71 billion, 88 percent more than the P2.5 billion profit a year ago.

PNB contributed 59 percent to total income at P2.78 billion, followed by Asia Brewery, Inc. (ABI) at P693 million 15 percent.

The tobacco business added P523 million or 11 percent to total while Tanduay Distillers Inc. (TDI) accounted for P337 million or 7 percent.  Eton’s contribution was P196 million or 3 percent.  Equity in net earnings from the 20.17 percent stake in VMC provided P172 million or 4 percent of total.
LTG’s balance sheet remained strong, with the parent company’s cash balance at P3.4 billion as of the end of September 2015.                                   Debt-to-equity ratio was at 3.31:1 as of end-September 2015 with the bank, and at 0.12:1 without the bank.
PNB’s income reached P5.26 billion until september, 42 percent higher than the P3.72 billion a year ago.

Net interest income was seven percent higher year-on-year (y-o-y), while net service fee income grew by 37 percent.  Other income declined by 25 percent to P4.2 billion due to lower trading gains.

ABI’s net income for January to September 2015 amounted to P694 million, a decline of 13 percent from the P797 million during the period.

ABI’s brands Cobra (carbonated energy drink), Absolute and Summit (water), and Tanduay Ice (alcopop) continue to be market leaders.  However, the intense competition in the beverage market continues to affect volumes and margins.

The tobacco business reported an income of P525 million for three quarters, 13 percent higher than the P464 million reported a year ago.

Equity in net earnings from the 49.6 percent stake in PMFTC amounted to P533 million, higher than P520 million equity in net earning in 9M14.

Despite the slightly higher income, the illicit trade continues to adversely affect the overall profitability of the cigarette business.

TDI’s unaudited net income reached P337 million for the first nine months of 2015, a turnaround from the loss of P83 million for the same period last year.

Revenues were relatively flat, as the slightly lower sales volume was partially offset by higher prices.
According to Nielsen, TDI’s market share stood at 24.9 percent as of the end of September 2015 compared to 24.2 percent as of end-September 2014.

Eton’s earnings comparative period last year. amounted to P197 million, an improvement over the P65 million reported in comparative period last year.

Rental income continues to account for a significant portion of earnings, with all five existing BPO office buildings fully leased out.  Eton plans to increase its portfolio of office buildings.