While optimistic that its business remains on strong footing, taipan Lucio Tan’s LT Group is also being cautious as interest rates remain high while inflation is rising.
“We are excited about the future. Our fundamentals are solid. While we are cautiously optimistic about the macroeconomic trends as interest rates are likely to stay higher for longer while the inflationary environment may stay longer than expected,” said LT Group President and COO Lucio Tan III during the company’s annual stockholders’ meeting on May 3, 2024.
He said that the portfolio companies' solid business models, brand franchises, and strong balance sheets will allow them to withstand the macroeconomic headwinds during the year.
“As we move forward together, we will do so with unity and resilience. We remain steadfast in our commitment as we work towards our shared vision,” Tan said.
Tan noted that, if inflation and interest rates finally go down, this will help reign in the continued rise in manufacturing costs. "It should positively impact LTG’s different businesses, and help stabilize and even grow our volumes,” he said.
Meanwhile, the family patriarch LTG Chairman Lucio Tan said “The year 2023 was a year of transition, as we saw a new President (Lucio Tan III) take over the helm of LT Group, Inc. (LTG) in May. I am pleased that the management and employees of the companies under LTG threw their support behind him, so that the transition was as smooth as possible. We were able to move Forward Together.”
“As we moved with unity and steadfastness, from the rank-and- le employees to the management team, LTG was able to report an attributable net income of P25.42 billion in 2023, a bit higher than the P25.14 billion reported in 2022.
“We achieved this in the face of high inflation and a high-interest rate environment, as the groundwork laid down before has enabled us to remain financially strong.
“We will continue to move Forward Together, synchronized and propelling us toward our shared vision with resilience,” he said.
The LTG president also echoed that while year 2023 was a year of transition for LT Group, Inc., it was also a year of significant challenges as the country emerged from the aftermath of the Covid-19 pandemic with an average inflation rate of six percent in 2023.
“The resulting consequence is not difficult to imagine, like higher prices of goods, raw materials, services, utilities, and reduced capacities of the citizens or consumers,” he said.
“Against this environment, your company successfully navigated through the challenges, and I am proud to report to you that LTG’s attributable net income in 2023 amounted to P25.42 billion.
“The outcome was made possible by the concerted efforts of all subsidiaries to perform and deliver the numbers that contributed to the performance of the Company,” said Tan.
Against this backdrop LTG declared cash dividends in 2023 amounting to P1.20 per share, or a total of P12.99 billion, representing a 51.7 percent payout rate as the company posted strong earnings.