Saturday, May 3, 2014

Lucio Tan (LT Group, Inc.)

Financial Highlights (2012)

          LT Group’s consolidated net income attributable to equity holders of the company grew by 29.1% from P5.8 billion in 2011 to P7.5 billion in 2012 mainly a result of the 22.1% in operating income.

        The distilled spirits segment grew its revenues by 4.2% as an effect of the increased sales volume of its products. The beverage group also reflected an improvement in its sales by 1.6%, with energy drinks and bottled water as top performers in the product mix. Although both the aforementioned segments improved, the sales of the property development and tobacco segments declined, causing LTG’s consolidated revenues to do down by 6.5%. The property segment’s construction of projects slowed down as a result of design changes and delays in securing necessary permits.

        LTG’s current ratio improved slightly from 1.4:1 in 2011 to 1.5:1 while the debt-to-equity ratio likewise improved to 0.85:1.00 from 0.87:1.00. Earnings per share increased to P0.85 per share from P0.68 per share.

Company Profile

LT Group Inc manufactures a variety of wine related products. The Company produces rum, alcohol, sugar, glass bottles, and other raw materials. LT Group serves customers throughout the world.

The company (formerly Tanduay Holdings, Inc.) was originally incorporated in 1937 as the Manila Wine Merchants, Inc. to engage in trading business. On September 22, 1995, the SEC approved the change in Company’s name to “Asian Pacific Equity Corporation” and the change in its primary purpose to that of a holding company. On July 30, 1999, the company acquired Twin Ace Holdings Corp, now known as Tanduay Distillers, Inc., a producer of distilled spirits. On November 10, 1999, the SEC approved the change in the corporate name from “Asian Pacific Equity Corporation” to “Tanduay Holdings, Inc.” On September 24, 2012, the Board approved the change in its name from Tanduay Holdings to “LT Group, Inc.”

At the end of 2012, LT Group completed the acquisition of majority stakes in Asia Brewery, Fortune Tobacco and Eton Properties. The folding in of Philippine National Bank was completed in 2013. The company has the following businesses:

·         Asia Brewery, Inc. (ABI) is a flagship in the Philippine beverage industry owing to its extensive distribution network and broad portfolio of alcoholic and non-alcoholic products. Founded in 1982, ABI produced its first batch of beers from its plant in Cabuyao, Laguna. Over the years, ABI launched products that have become a part of every Filipino home. It began in 1988 when it launched its most successful brand called Beer Pale Pilsen (now known as Beer na Beer).
In 1992, the company began to diversify its product portfolio from beer to non-alcoholic beverages with Absolute Pure Distilled Drinking Water and Summit Natural Drinking Water collectively leading the diverse bottled water market with 30% share. ABI continued with its aggressive expansion and it brought Colt 45 Malt Liquor to the market. In 2006, the company launched Cobra Energy Drink with the latter owning 70% share in the energy drinks market. In 2009, ABI once again surprised the beverage industry with the creation of Tanduay Ice Alcomix. The product became an instant hit among the youth as it invaded both on and off the premise outlets.
Eton Centris in Quezon City
·         Eton Properties Philippines, Inc. has made a strong presence in the local property development scene in just 5 years. With some 47 projects encompassing residential, township, commercial and office development, it has further expanded by creating two brands, Belton Communities and First Homes. Eton City is the Company’s flagship, multi-billion peso project occupying some 1,000 hectares of prime lands in south Manila. It is home to South Lake Village, the country’s first residential island lot development and other unique residential communities. Eton Centris, will be gateway to the emerging 250-hectare Triangle Park Central Business District in Quezon City.

·         PMFTC, Inc. merged two market leaders in the tobacco industry, Philip Morris Philippines Manufacturing Inc. and Fortune Tobacco Corporation. The merger effectively made it the leading tobacco company in the country with 90% total market share. It now owns 43 of the 76 existing cigarette brands in the market. It contributes significantly to the LT Group’s operating income.

·         Tanduay Distillers, Inc. is the oldest among the subsidiaries and carries with it the distinction of being one of the biggest brands in the distilled spirits category with a 99% share in the rum category.

Philippine National Bank
·         Philippine National Bank/Allied Bank. On July 27, 2012, LTG’s Board approved the acquisition of 34.79% of PNB and 27.62% of Allied Bank through the purchase of 100% of the outstanding capital stock of 11 and two holding  companies of PNB and Allied Bank, respectively, all controlled by the Controlling Shareholders. On January 22, 2013, PNB’s Board approved to set the effective date of merger between PNB and Allied Bank on February 9, 2013.

Board of Directors

·         Lucio C. Tan – Chairman
·       Harry Tan – Vice Chairman
·         Michael G. Tan – President
·         Antonino L. Alindogan, Jr.
·         Juanita T. Tan Lee
·         Peter P. Ong
·         Wilfredo E. Sanchez
·         Carmen K. Tan
·         Lucio K. Tan, Jr.
·         Florencia G. Tarriela
·         Wilson T. Young

Technical Stock Graph (Source: Bloomberg)

        On June 9, 2009, LTG’s share of stock was value at P2.27. As of this posting, its value is P18.30. It increased by 706%. If you invested P10,000 on June 9, 2009, it’s now worth P80,611.00.

Price:   18.3/share (as of May 2, 2014)

Market Cap:  198,031 million (as of May 2, 2014)

Address:   11th Floor Unit 3 Bench Tower

                 30th Street cor Rizal Drive

                 Bonifacio Global City

                 Taguig City


Source: LT Group, Inc. Annual Report 2012

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