Emperador to miss income target for 2017

MANILA, Philippines – Andrew Tan-owned Emperador Incorporated expects to miss its target to double its net income by 2017, after its aggressive overseas expansion.

“We will come short of our target,” Emperador president Winston Co said in an interview following the company’s annual stockholders meeting on Monday, May 15.

Emperador earlier projected net income to double by 2017 to P11.6 billion from P5.8 billion in 2013 after it has aggressively expanded overseas through acquisitions.

Among the liquor assets it acquired over the past few years were Scotch whisky maker Whyte and Mackay Group, Bodegas Fundador in Spain, and Domecq brandy and wines of Pernod Ricard.

Emperador has also embarked on a P5-billion, two-year share buyback program.

Co said the share repurchase program was implemented because the company believes that the stock is “seriously undervalued.”

“We believe it is seriously undervalued that is why we have embarked on share buyback program. The company has earmarked P5 billion to buy back shares from the market for a period of two years. We believe that the buyback will create shareholder value and bring the value to where it has to be,” Co said.

New products for the young

For this year, Co expects the company profits to be better than a year ago level as it plans to launch new products in the market.

During the first quarter of 2017, Emperador posted a net profit of P1.5 billion, up 7% from a year ago. (READ: PH’s Emperador buys Spain’s Fundador)

First quarter revenues stood flat at P8.9 billion, with Brandy accounting for 73% and Scotch Whiskey accounting for the remaining 27%. Revenues from the Scotch Whisky business grew 12%.

Revenues from the Scotch Whisky business grew 12% from a year ago, driven by own labels The Dalmore and Jura. These we’re particularly stronger within UK, Travel Retail, and Latin America.

On the other hand, the brandy business, which combined Philippines’ Emperador and Spain’s Bodegas Fundador brands, sustained revenues from a year ago.

Emperador recently introduced into the market Andy Cola, a ready-to-drink mix of the familiar good taste of cola and the smoothness of Andy Player whisky, in a bid to further grow whisky consumption in the country.

The product is targeted among the young and upwardly mobile consumers in the Philippine market.

It also expanded its brandy portfolio by launching Hotshot Brandy. – Rappler.com