Lucio Tan group's Q1 profit dragged down by PNB, PMFTC

Posted at 05/16/14 1:00 PM

MANILA, Philippines – Lucio Tan's LT Group Inc. reported a 61 percent drop in its attributable net income in the first quarter of this year, as its banking, tobacco and property businesses slumped.

The conglomerate said its attributable net income fell to P1.61 billion in the first quarter of 2014, compared to the P4.14 billion it posted in the same period last year “amidst a challenging environment.”

Philippine National Bank (PNB) posted a 65 percent drop in its profit to P1.35 billion in the first quarter of 2014 from the P3.85 billion in 2013 due to lower trading gains.

In the first quarter of 2014, PNB only booked P582 million in trading gains compared to the P4.7 billion in trading gains in the same period last year.

The bank had a stock rights offering in mid-February that raised P11.6 billion, P10 billion of which will be used to recapitalize PNB Savings Bank to grow the bank’s consumer loan business.

PNB Savings Bank is targeting to open over 20 branches this year.

Meanwhile, LT Group’s tobacco business also saw a 63 percent slump in its profit to P576 million in the first quarter of this year from the P1.56 billion in the first quarter last year.

The company said Philip Morris Fortune Tobacco Corp. (PMFTC) continues to be “adversely affected by the illicit trade in cigarettes.”

The firm cited another round of increase in the excise tax to start 2014.

“These rates apply to cigarettes that are withdrawn from the factories this year. In the upper tier, which covers the premium brands like Marlboro, the excise tax increased by Php2/pack of 20 sticks to Php27 from Php25. There was larger increase in the tax of the lower tier at Php5/pack to Php17 from Php12,” it said.

The firm added that while PMFTC’s sales volume rebounded in the first quarter to 16.2 billion sticks, the super-low segment now accounted for 37 percent of the total industry’s volume from 23 percent in the first quarter last year, which affected profitability.

Eton Properties also reported its net income fell by 74 percent to P29 million in the first quarter of this year, from last year’s P109 million due to lower residential revenues.

Tanduay Distillers Inc. also ended the first quarter with a loss of P11 million due to the higher cost of raw materials and higher selling and marketing expenses.

Asia Brewery, Inc., on the other hand, saw a net income growth of 15 percent to P263 million in the first quarter from the P229 million reported in the same period last year.