LT Group’s strong 2024 masks challenges facing empire’s 32-year-old Tan scion

Insider spotlight:

• LTG net income up 14 percent to P28.92 billion in 2024.
• Tobacco and banking segments made up 85 percent of earnings.
• Tobacco volumes down 11 percent amid competition, illicit trade.
• Eton Properties profit fell 53 percent due to weak leasing activity.
• PAL and MacroAsia face steeper challenges outside LTG umbrella.
• P13.53B in dividends declared; payout ratio at 53.2 percent.
• Lucio Tan III focusing on innovation and long-term resilience.

Lucio Tan Group Inc. (LTG) delivered steady growth in its second year under the leadership of its president Lucio Tan III, even as the broader Tan business empire contended with persistent challenges in aviation and support services.

For 2024, LTG posted a 14-percent increase in net income to P28.92 billion, supported by robust gains in tobacco, banking, and beverages.

The performance highlights the group’s resilience under Tan, a 32-year-old who graduated summa cum laude Stanford University.

He assumed the presidency in 2023, replacing his uncle, Michael Tan, at the helm of the family’s flagship holding firm. According to company insiders, the young Tan — the grandson of the empire’s founder, Lucio Tan — is guided and advised by his grandmother Carmen Tan and the family’s chief legal counsel Carlu Fernandez.

Major units’ performance

In his president’s report during the group's online annual stockholders’ meeting on Wednesday, May 7, 2025, the LTG chief noted that the conglomerate’s diversified portfolio cushioned the impact of economic volatility.

Tobacco unit Fortune Tobacco Corp. remained the top contributor, generating P12.72 billion or 44 percent of LTG’s net income.

However, cigarette volume declined by 11 percent, pressured by affordability concerns, the growing shift to vape products, and illicit trade, which continues to erode market share despite improved enforcement efforts.

Philippine National Bank (PNB) contributed 41 percent of group earnings, benefiting from rising interest margins and operational efficiencies. Asia Brewery posted a 46-percent rise in net income, supported by higher beverage sales and product innovations in the alcoholic drinks segment.

In contrast, real estate arm Eton Properties Philippines Inc. reported a 53-percent drop in net income, weighed down by soft leasing activity and elevated costs. While occupancy improved in select office towers, the company continues to navigate post-pandemic adjustments in commercial and retail space demand.

Deeper, broader challenges

Despite LTG’s gains, the broader Tan business empire faces deeper challenges from unlisted affiliates.

Flag carrier Philippine Airlines continues to grapple with high fuel costs and fleet modernization requirements.

Meanwhile, aviation services provider MacroAsia Corp. faces sharply higher operating costs with a looming tenfold increase in airport property lease rates for its Lufthansa Technik Philippines joint venture.

Tan III has signaled continued investments in digital transformation, ESG initiatives, and operational streamlining across the group, even as legacy businesses under the broader Tan empire demand renewed attention.