LT Group, Inc.’s (LTG) reported today (March 16, 2018) that its unaudited attributable net income for full year 2017 amounted to Php10.83 billion, 15% more than the Php9.39 billion reported for 2016.

Philippine National Bank (PNB) contributed Php4.83 billion or 45% of total attributable income, followed by the tobacco business at Php4.39 billion or 40% of total. Tanduay Distillers, Inc. (TDI) added Php631 million or 6%, while Asia Brewery, Inc. (ABI) accounted for Php551 million or 5%. Eton Properties Philippines, Inc. (Eton) provided Php348 million or 3%, and the 30.9% stake in Victorias Milling Company, Inc. (VMC) contributed Php174 million or 2%.

LTG’s balance sheet remains strong. As of end-2017, the cash balance of the parent company stood at Php1.6 billion. Debt-to-Equity Ratio was at 3.70:1 with the Bank, and at 0.15:1 without the Bank.

Philippine National Bank (PNB)

PNB’s net income was Php8.56 billion in 2017, Php1.18 billion or 16% higher than 2016’s Php7.38 billion. The higher income was attributed to higher net interest income, net service fee income and higher gain from the sale of Real and Other Properties Acquired (ROPA) which was at Php4.16 billion in 2017, Php1.60 billion or 62% higher than the Php2.56 billion gain booked in 2016.

Net Interest Income increased by 13% or Php2.53 billion to Php22.07 billion on the back of a 17% growth in loans and receivables to Php502 billion. Net Service Fees and Commission Income increased by 20% to Php3.20 billion from Php2.66 billion due to higher loan, remittance and deposit-related fees. Other Income was 7% lower at Php8.62 billion from Php9.29 billion primarily due to lower Trading and Foreign Exchange Gains, partially offset by higher ROPA sale gains.

Tobacco

Income from the tobacco business was Php4.40 billion in 2017, while equity in net earnings from the 49.6% stake in PMFTC, Inc. (PMFTC) reached Php4.37 billion.

The higher earnings were mainly attributed to better pricing and improved mix. In November 2016, PMFTC raised the price of Marlboro, the first time since 2013.

The industry’s total volume was estimated to have decreased by 6% to 74.9 billion sticks, largely due to excise tax driven price increases, tempered by trade loading towards the end of 2017, in anticipation of more price increases as the excise tax was further increased starting 2018.

Tanduay Distillers, Inc. (TDI)

For FY2017, TDI’s net income was at Php631 million, 31% or Php277 million lower than the Php908 million reported for 2016.

Liquor revenues were 20% higher y-o-y at Php15.19 billion. Based on Nielsen estimates, TDI’s market share in the Visayas was at 61% and in Mindanao at 65% as of December 2017. However, revenues from ethanol were 31% lower to Php1.60 billion as volume dropped 21%, and selling prices were lower.

Asia Brewery, Inc. (ABI)

ABI’s net income for 2017 was at Php552 million for 2017, 69% lower than 2016’s Php1.76 billion, primarily due to higher spending on new products. Moreover, 2016’s income included a Php594 million extraordinary income arising from the gain from the revaluation of the beer assets.

Revenues were 17% higher y-o-y at Php13.89 billion from Php11.85 billion with the higher contribution from bottled water, soymilk and packaging partly offset by the decrease from energy drinks. Cobra Energy Drink and Vitamilk soymilk continue to market leaders, while Absolute and Summit bottled water have the second largest market share.

Operating expenses increased as the Company had to spend more on advertising and selling expenses due to the competitive environment in the carbonated beverage segment, and to promote the recently launched Vitamilk in returnable glass bottles. The Company also had to book additional depreciation expenses from the new soymilk plant.

Eton Properties Philippines, Inc. (Eton)

Eton’s net income for 2017 was Php348 million, Php42 million or 11% lower than 2016’s Php390 million. Revenues were 21% lower at Php2.23 billion with lower sales due to the change in strategy to focus on increasing its recurring income base. But leasing revenues were 9% higher y-o-y at Php1.39 billion with the opening of 2,100 square meters (sqm) of additional retail space in Eton Tower Makati and higher lease rates. Eton’s BPO office buildings had a take-up rate of 99% as of end-2017.

Eton is increasing its leasing portfolio from the current 125,000 sqm of office space and 36,000 sqm of retail space. These are 6,500 sqm from Eton City Square in Laguna, 1,300 sqm from Eton Square Ortigas (community lifestyle dev’t. in San Juan City), the 5,200 sqm expansion of Centris Walk and the 39,000 sqm BPO office building at Eton Centris, Quezon City, and the 15,000 sqm retail and office component of the mixed-use WestEnd Square in Pasong Tamo, Makati.