LT Group profits drop on one-time costs

LT Group, Inc. posted a 38 percent drop in attributable net income to P9.95 billion for the first nine months of 2021 from the P16.10 billion reported for the same period in 2020.

In a disclosure to the Philippine Stock Exchange, the firm said “The decline is mainly due to the higher provisioning for credit losses booked by its banking subsidiary and the elimination of the gain from the transfer of real estate assets at the consolidated level.”

The tobacco business accounted for P13.27 billion 33 percent of LTG’s total attributable income while Tanduay Distillers, Inc. (TDI) added P998 million or 10 percent of total.

Asia Brewery, Inc. (ABI) contributed P411 million while Eton Properties Philippines, Inc. (Eton) accounted for P366 million, around 4 percent of total from both subsidiaries.

LTG’s 30.9 percent stake in Victorias Milling Company, Inc. (VMC) added P169 million or 2 percent of total. Philippine National Bank (PNB) had a negative net contribution of P5.20 billion after eliminating the gain of P33.60 billion at the consolidated LTG level.

In June, LTG declared a Php0.24 per share special cash dividend or a total of P2.60 billion and was paid in July.

This brought total cash dividends declared in 2021 to P0.48 per share or P5.19 billion. This is equivalent to 24.7 percent of LTG’s 2020 attributable net income.

PNB reported a net income of P24.43 billion for the first nine months of 2021 under the pooling method, inclusive of a P33.60 billion gain from the transfer of some properties into PNB Holdings Corporation.

However, at the consolidated LTG level, these gains were not recognized, which together with higher provisioning for credit losses resulted in a P5.21 billion loss contribution from PNB to LTG.

LTG’s tobacco business had a net income of P13.32 billion in the first nine months of 2021, 9% more than the P12.17 billion earned in the same period last year but warned that continued price hikes to pass on higher excise taxes may result in further volume declines.

TDI’s net income for the first nine months of 2021 was P1.00 billion, 8 percent lower than the P1.09 billion in the same period last year due to lower margins as a result of higher production costs, higher operating expenses and lower selling prices for bioethanol.

ABI’s net income for was P411 million, a significant improvement from the P4 million reported in the first nine months of 2020 largely due to the absence of any losses from the AB Heineken joint venture.

Eton’s net income for the first nine months of 2021 was P367 million, 42 percent lower than the P633 million earned in the same period last year due to the decline in residential unit sales and lower leasing income.

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Article was originally published in Manila Bulletin and written by James A. Loyola.