Emperador Inc., the liquor unit of tycoon Andrew Tan, is embarking on a P5-billion two-year share buyback program as the company expects to miss its target to double net income by 2017.
“We will come short of our target,” Emperador president Winston Co said in an interview following the annual stockholders’ meeting.
Emperador earlier projected that net income would double by 2017 to P11.6 billion from P5.8 billion in 2013, after it aggressively expanded overseas through acquisitions.
Emperador posted a net profit of P1.5 billion in the first quarter, up seven percent from a year ago. First-quarter revenues were flat at P8.9 billion, with Brandy accounting for 73 percent and Scotch Whiskey 27 percent. Revenues from the Scotch Whisky business grew 12 percent from a year ago, driven by own Scotch whisky labels The Dalmore and Jura which were particularly stronger within UK, Travel Retail and Latin America.
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.
Meanwhile, Co said the share repurchase program was implemented because the company believed that the stock was “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.
Co said he expected the company to post better profit than a year ago, as it planned to launch new products in the market.
