LBC sees strong profit growth in ’16

LEADING local logistics firm LBC Express Holdings Inc. expects to hit P1 billion in net profit before tax this year on the back of brisk business reflective of a fast-growing economy.

In an interview after the company’s stockholders meeting yesterday, LBC Express Holdings president and chief operating officer Mike Camahort said 2016 was “looking just as good or even better than last year.”

Asked whether the company would be able to hit P1 billion in net profit as expected by some investors, Camahort said: “We’re working hard to breach that P1 billion.”

In 2015, LBC Holdings’ net income before tax rose by 243 percent to P686.9 million.  In the first quarter of 2016, net income before tax stood at P310 million, rising by 36 percent year-on-year.

The LBC group derives 80 percent of its business from cargo delivery and 20 percent from its money remittance business.

LBC Express Holdings chief finance officer Enrique Rey Jr. said that in two and a half weeks, the group would release its second quarter earnings. “It’s better than first quarter results,” Rey said. “I think the shareholders and future investors will be very impressed when they see the mid-year numbers.”

The group is seen “trending” toward the P1-billion net profit before tax, he added.

In January, the LBC group faced a P1.8-billion asset attachment and garnishment order initiated by the state-controlled Philippine Deposit Insurance Corp. (PDIC) as part of a collection claim on behalf of a defunct LBC banking affiliate.  By end-February, LBC obtained a court ruling lifting the order, which freed up assets and liquidity and thereby eased the administrative and operational challenges from the legal case.

“We’re business as usual and much more. The second quarter should prove to be very favorable,” Camahort said, adding that LBC’s lawyers were now addressing the legal case.

The company is looking at the second semester with greater optimism. Historically, the second semester of the year tends to be 10 to 15 percent better than LBC’s output in the first semester, primarily because of robust activities during the runup to the Christmas season.

LBC has set aside P200 million for expansion activities for this year through next year as the group aims to be an integrated logistics solutions firm.  It has invested in a cold storage chain and is increasing its warehousing capabilities.  It currently has about 100,000 square meters of warehousing floor space, which it intends to double or triple in the next few years.

With close to 8,000 employees and 1,300 offices nationwide, LBC is seen to have the most extensive retail footprint servicing capability in the country.

A follow-on offering is still something that LBC is considering. “We will decide in the next few months,” Camahort said. Doris Dumlao-Abadilla