050207: Tanduay profit down 16% due to lower sales

By Zinnia B. Dela Peña
The Philippine Star 05/02/2007

Tanduay Holdings Inc., the hard liquor unit of tycoon Lucio Tan, reported a 16-percent drop in its net income last year to P620 million from P735 million a year earlier due to lower sales and higher interest expenses.

In a financial report filed with the Securities and Exchange Commission, Tanduay said consolidated revenues fell four percent as sales volume dropped six percent on weak consumer demand as purchasing power was severely affected by the increase in fuel cost, value-added tax, and the adverse impact of the typhoons that hit the country late last year.

The shift in consumer preference to brandy also further decreased the rhum market share particularly in the Luzon area, Tanduay said.

Tanduay said while the acquisition of Unimark Investments, a special purpose vehicle, added P19 million in consolidated revenues, it contributed to the increase in consolidated operating expenses by 11 percent.

Operating expenses amounted to P1.01 billion or 24 percent higher than the previous year’s P815 million on account of higher selling expenses by 11 percent and general administrative expenses by 82 percent. Interest expense likewise jumped 191 percent.

As of end-December last year, Tanduay had total assets of P12.2 billion, up 31 percent from the previous year’s P9.3 billion. Its total liabilities, on the other hand, increased 61 percent due to the loan availment of a P4.2 billion long-term debt from a consortium of local banks which was used to pay off its short-term loans amounting to P3.65 billion.

Unimark also has an existing loan of P1.06 billion payable in four years.

 

http://www.philstar.com/philstar/NEWS200705020706.htm