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GT Capital earnings slide in Q1

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By Arra B. Francia, Senior Reporter

GT Capital Holdings, Inc.’s attributable profit slumped by eight percent in the first quarter of 2019, following lower sales from its auto and property segments.

In a regulatory filing, the listed conglomerate said net income attributable to the parent went down to P3.42 billion from the P3.74 billion it delivered in the same period a year ago.

“The decline was principally due to slow revenue growth from real estate sales and automotive operations,” the company said.

Revenues went up by three percent to P47.02 billion, driven by higher contributions from its banking and insurance businesses.

Automotive operations through Toyota Motor Philippines Corp. (TMP) recorded flat revenue growth to P33.8 billion, resulting to a 25% drop in net income to P1.8 billion. TMP’s retail sales volume reached 33,554 units during the quarter, three percent lower than the 34,440 units it sold in the same period a year ago.




With this, TMP’s market share declined to 34.6% by end-March, versus 35.5% last year. TMP remains to be the dominant auto maker in the Philippine market despite the drop.

GT Capital President Carmelo Maria Luza Bautista noted that the first-quarter results are already showing signs of improvement, given that they saw a 12% volume decline last year following the implementation of the tax reform law that increased excise taxes on new vehicles.

“This for us is a sign of recovery. It’s a good indicator showing easing inflation and the rebound in consumer sentiment,” Mr. Bautista said in a media and analysts’ briefing for first-quarter results in Taguig, Tuesday.

“We’re quite confident that as inflation stays benign and as consumer confidence starts to normalize at its previous levels, the volume sales will catch up in the rest of the year,” Mr. Bautista said.

Metropolitan Bank and Trust Company (Metrobank) grew its net income by 15% to P6.8 billion, boosted by loan growth and margin expansion and higher fee-based income. Metrobank’s loan portfolio was up by nine percent to P1.4 trillion for the quarter, while deposits reached P1.6 trillion.

Consolidated assets for the listed lender hit P2.3 trillion, while equity stood at P288.7 billion.

Its property segment through Federal Land, Inc. and Property Company of Friends, Inc. (Pro-Friends) generated a combined profit of P431.1 million in the first quarter, from a six percent increase in consolidated revenues to P4.6 billion.

GT Capital disclosed last week that it is divesting its 51% stake in Pro-Friends, in exchange for P20 billion worth of land covering 702 hectares mostly in Cavite. The divestment comes four years after GT Capital first acquired a 22.68% stake in Pro-Friends back in 2015, and a 28.3% stake in 2016.

Mr. Bautista said the 702-hectare land bank under Pro-Friends is no longer suited for affordable housing projects, which was the purpose for investing in the company in the first place.

“The investment rationale at that point was really to gain a foothold in affordable, we saw it as a good complement to our existing property development arm which was Federal Land being in mid- to high-end condominium all in Metro Manila,” Mr. Bautista said.

Meanwhile, GT Capital’s affiliate Metro Pacific Investments Corp. registered a core net income of P3.7 billion, three percent higher year on year. The infrastructure conglomerate’s performance was supported by higher earnings from the Manila Electric Company, volume growth from Maynilad Water Services, Inc., and the higher number of patients in its hospital unit.

Insurance provider AXA Philippines posted a 46% increase in consolidated net income to P808.4 million.

Shares in GT Capital plunged 4.12% or P35 to close at P815 each at the stock exchange on Tuesday.