LT Group Inc. plans to keep capital expenditures within its historical range this year while holding off on expansion, focusing instead on boosting profitability across existing businesses amid global uncertainties.
In a media briefing on Wednesday, Chief Financial Officer Jose Gabriel Olives said that annual capital was “anywhere in the range of P6 billion to P8 billion” over the past five years.
“Going forward, we were probably expecting a bit more, but in the light of everything that’s happening, it’s currently being reviewed, so we may go back to our historical numbers,” he added.
President and COO Lucio Tan III said the conglomerate was prioritizing optimization over expansion.
“At this point in time, we’ve been primarily focused on optimizing... the current set of businesses that we have,” he said.
“The key is we’re trying to execute as much as possible in terms of delivering and focusing on the operating profitability.”
He said the group aimed to “maximize the [return on equity] and net income of a lot of the operating companies,” with expansion plans to follow later.
“At some point... we’ll then enter into expansion mode.”
Tan said they were not actively pursuing divestments for now, citing strong synergies within the group.
“We’ve been so far happy with a lot of the synergies... there’s so much opportunity in terms of maximizing the businesses that we currently have,” he said.
The group also ruled out near-term investments in the energy sector.
“We really have no investments nor specific plans on the energy side at this point in time,” Olives said while acknowledging that rising oil prices were continuing to weigh on costs.
Tan said the current economic situation, especially the significant increase in oil prices arising from the war in the Middle East, presented significant challenges “to a lot of the different businesses.”
Focusing on banking, which accounts for a significant portion of earnings, Tan said macroeconomic pressures could affect borrowers, adding that the group was working to ensure “that we provide support and assistance to ensure that [non-performing loans] don’t escalate.”
Despite the risks, he said the group remained upbeat with regard to Philippine National Bank (PNB).
“We are extremely optimistic about PNB. We are aiming for significant growth, both from a loan volume standpoint as well as an income standpoint,” he said.
For the beverage business, Tan noted rising input costs.
“We are seeing a little bit of increase in the raw and packaging materials due to increased shipping costs,” he said, adding that the group had “a lot of initiatives in place to offset those increases.”
“So overall, we are still excited about the growth for LTG as a whole. We are mindful of a lot of the challenges... but we are confident that we can address all of those,” he said.
LT Group shares on Wednesday climbed P0.08, or 0.53 percent, to close at P15.20 each.
