The holding firm of business tycoon Lucio Tan LT Group Inc. said it is “guarded” in its outlook for the rest of 2020, even as it showed confidence that its strong performance last year will allow the company to endure the challenges.
LT Group is composed of Philippine National Bank (PNB); Tanduay Distillers, Inc.; Asia Brewery, Inc.; Eton Properties Philippines, Inc.; PMFTC, Inc.; Fortune Tobacco Corp.; and Victorias Milling Co., Inc.
LT Group President and Chief Operating Officer Michael G. Tan said in a virtual stockholders meeting “The government estimates that the economy will contract by 2% in 2020, but some economists expect a higher deceleration of 10–20%. With purchasing power affected, demand for consumer goods is expected to be weak, and will affect the sales volumes of the products of PMFTC, Tanduay and Asia Brewery,”.
“Eton will also be affected as some tenants may end their lease contracts. PNB will have to grapple with non-performing loans and slower demand for loans,” he added.
“With the COVID-19 pandemic, we have a guarded outlook for 2020.”
LT Group posted a 41% earnings hike to P6.21 billion in the first quarter due to higher tobacco prices and rental rates. The tobacco business contributed P4.99 billion, PNB added P761 million, Tanduay accounted for P199 million, Eton added P168 million, Asia Brewery pitched in P74 million, and Victorias Milling contributed P91 million.
“We cannot fully predict what the impact will be, as we adjust to the various permutations of [lockdowns] in the different parts of the country. (But) 2019 showed the good foundation of our company which we hope will help us weather this storm,” he told BusinessWorld after the stockholders’ meeting.
“Total capex for the group’s subsidiaries was P7 billion in 2019. Capex for this year should be around the same amount as there are no expansion plans in the pipeline,” Mr. Tan added.
In 2019, LT Group’s attributable net income reached P23.12 billion, or 43% higher than the P16.19 billion reported for 2018. This was the biggest income that the company reached since its re-IPO (initial public offering) in April 2013.
LT Group, Inc. is listed in the Philippine Stock Exchange as $LTG and as of June 30, 2020, 03:30:00 PM it’s last traded price was PHP 8.00 +1.27% higher than it’s previous closed.
-Stockbytes PH, June 29, 2020
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