MANILA, Philippines — LT Group Inc. (LTG), the listed conglomerate of taipan Lucio Tan, reported an unaudited attributable net income of P21 billion in 2020, down 9.1 percent compared to the P23.12 billion in 2019.
LT Group’s businesses are in banking through Philippine National Bank, tobacco through PMFTC, liquor through Tanduay Distillers Inc., property through Eton Properties Philippines Inc. and beverage through Asia Brewery Inc.
Tanduay ‘s net income improved by 65 percent to P1.12 billion in 2020 from a year ago due mainly to the increase in the volume of liquor sales and a 34 percent decrease in selling and marketing expenses to P1 billion.
Tanduay managed to churn in a 33 percent increase in revenues from liquor due to higher volume and higher prices. On the other hand, revenues from bioethanol declined by 24 percent as a result of lower volume and lower average selling price.
The group’s tobacco business posted a net income of P16.9 billion in 2020, nine percent more than in 2019 on the back of the higher share of premium Marlboro with customers shifting from mid-priced Fortune, as well as the price increases to pass on higher excise taxes.
However, the industry’s volume is estimated to have declined by 12 percent last year due to the end-Aug 2019 and October to November 2020 price increases as a result of higher excise taxes, coupled with the impact of the enhanced community quarantine (ECQ) implemented in Luzon starting March 17 and in other select cities thereafter up to end-May 2020. As a result, PMFTC’s volume was 16 percent lower year-on-year in 2020.
In all, the cigarette industry is bracing for more excise taxes after President Duterte signed Republic Act (RA) 11346 in July 2019 which increased further the excise tax on tobacco starting January 2020.
Taxes will increase by P5 per pack annually from 2021 to 2023, then by five percent annually thereafter. This is from an increase of P35 per pack in 2019 and to P45 per pack in 2020.
“LTG is not against tax increases, but believes that the hikes should be moderate. Continued price hikes to pass on higher excise taxes may result in further volume declines,” it said in its financial report.
Asia Brewery posted a net income of P591 million last year, up 48 percent from a year ago. The higher income is largely due to the absence of losses incurred for the joint venture with Heineken as it transitions to the engagement of ABI to brew and distribute Heineken® and Tiger® beers in the Philippines.
Article and Photo originally posted by Philippine Star last March 21, 2021 12:00am and written by Iris Gonzales.
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