Tycoon Lucio Tan-led conglomerate LT Group Inc. (LTG) saw a 9-percent year-on-year decline in first semester attributable net profit to P10.03 billion due to the slump in earnings contribution from the banking and beer businesses.
The earnings decline was tempered by higher contribution from the tobacco, hard liquor and property development businesses.
For the second quarter alone, LTG’s attributable net profit declined by 20.8 percent year-on-year to P3.81 billion.
The tobacco business accounted for 82 percent of total attributable income. Equity in net earnings from LTG’s 49.6-percent stake in PMFTC was P8.25 billion for the six-month period, 46 percent higher than the previous year’s level.The increase in income was attributed to the higher share of premium Marlboro as well as the price increases implemented in late August 2019. The volume of the tobacco industry was estimated to have declined by 17 percent in the first half due to the impact of the enhanced community quarantine implemented in Luzon starting March 17 and in other select cities thereafter.
The government continued its efforts against the illicit trade of cigarettes, which included smuggled and locally produced products.
Starting January 2020, the excise on tobacco has increased from P35 per pack in 2019 to P45 per pack, further increasing by P5 per pack annually from 2021 to 2023, then increasing by 5 percent annually thereafter.
“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,” LTG said.
Philippine National Bank (PNB) contributed P795 million, or 8 percent, of the net income. PNB’s net income under the pooling method was P1.44 billion for the first half, 64 percent lower year-on-year due to the P8.44 billion provision for credit losses set aside during the period due to the ongoing COVID-19 pandemic.
Tanduay Distillers Inc. contributed P541 million in net income, or 5 percent, while Eton Properties Philippines Inc. added P402 million, or 4 percent.
Asia Brewery Inc. accounted for P40 million, or less than 1 percent, while the 30.9-percent stake in Victorias Milling Company Inc. accounted for P148 million, or 1 percent. —Doris Dumlao-Abadilla INQ
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