November 19, 2014

LTG posts 67% drop in 9M14 net income

In a press statement, LT Group Inc (LTG) reported 9M14 net income of P2.5b, down 67% YoY, on lower trading gains of its banking unit and continued challenges in its tobacco business unit. PNB (see note above), which contributed 52% of LTG’s 9M14 net income, posted a 46% drop in net income on lower trading gains that offset the 21% hike in net interest income.

Asia Brewery was the only bright point in LTG’s operations as it posted a 27% hike in 9M14 net income to P797m. The company maintained market leadership for carbonated energy drinks, bottled water and the alcopop market. AB accounted for 32% of LTG’s bottomline. Meanwhile, the tobacco unit posted an 84% YoY drop in 9M14 net income amid tight competition and illicit trade in cigarettes by its competitor.

Liquor unit Tanduay Distillers Inc was still in the red by P83m in 9M14 on higher raw material costs as well as rising selling and marketing expenses amid an aggressive marketing campaign to gain market share. Tanduay however showed a turnaround in 3Q14 when it posted a net income of P89m but this was not enough to reverse the 1H14 losses. - WealthSec