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| PAL Express (Photo credit: Wikipedia) |
“We’re not putting it in. PAL will not be part of the LT Group. It’s part of the family holdings but not the LT Group,” Michael G. Tan, president of LT Group, told reporters.
Tan said PAL as an aviation company is different from the basket of consumer-related businesses held by LT Group.
“Essentially, we are focused on being a consumer firm,” said LT Group chief financial officer Jose Gabriel D. Olives.
In October, LT Group’s board of directors approved the deferment of the acquisition of the aviation unit. Concerns were raised over the negative effect of loss-making PAL in LT Group’s books.
LT Group, formerly Tanduay Holdings Inc., earlier planned to acquire 49.84 percent and 50.97 percent of Philippine Airlines Inc. and Air Philippines Corp. (now PAL Express), respectively.
Tan said PAL will not be consolidated into the conglomerate even it if becomes profitable already.
In the nine months of its fiscal year ending March 2012, the airline’s parent firm PAL Holdings Inc. trimmed its losses by 24 percent to P2.74 billion compared with P3.59 billion as total revenues climbed by 2.4 percent to P55.68 billion from P54.38 billion on the back of higher revenues from its passenger and cargo businesses.
PAL, which is 49-percent owned by diversified conglomerate San Miguel Corp., is embarking an expansion program as it plans to further widen its global footprint to include the Middle East, Europe and Australia. It plans to acquire up to 100 brand new aircraft in line with its bid to reclaim the top slot in the local airline sector.
The decision not to include PAL in the listed holding firm was finalized last year, Olives said.
LT Group, which completed its consolidation program last year, is into beer (Asia Brewery Inc.), distillery (Tanduay Distillers Inc.), real estate (Eton Properties Philippines Inc.), banking (Philippine National Bank) and tobacco (PMFTC Inc.).
Moving forward, LT Group expects to continue being a beneficiary of strong consumer spending.
“I would think in the next couple of years it will be like that,” Olives said.
“We should obviously take advantage and grow our businesses in the consumer segment,” Olives said, adding that its units will offer new products to increase its market reach.
LT Group grew its profits by a third to P3.8 billion in the first quarter. Revenues picked up 14 percent to P17.7 billion “due to higher revenues from banking, distilled spirits and property development, which offset the revenue drop in the beverage and tobacco sectors,” LT Group said.
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