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GT Capital targets single-digit bottom-line growth this year

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GT Capital

By Arra B. Francia, Senior Reporter

GT Capital Holdings, Inc. aims to grow its bottom line by mid-single digits in 2019, banking on the recovery of its auto unit and the continued growth of its banking and property businesses.

“We are trying to shoot for single-digit growth,” GT Capital President Carmelo Maria Luza Bautista told reporters after the company’s annual shareholders’ meeting in Makati on Wednesday.

If realized, this would mark a turnaround from the six percent profit decline the conglomerate saw in 2018. It booked a net income of P13.4 billion as consolidated revenues fell 10% to P215.8 billion.

GT Capital was weighed down by Toyota Motor Philippines (TMP)’s performance last year due to the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) law, which increased the excise tax on automobiles.

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Retail vehicle sales dropped 17% to 153,004 units, resulting to a 14% decline in consolidated revenues to P159.2 billion. Net income accordingly slumped 39% to P8 billion in 2018.

“Hopefully, makikita mo pa rin ’yung (you can see) early signs of recovery. In fact it was reported already in the papers this morning that volume sales are starting to see a turnaround. So hopefully magtuloy-tuloy na ’yun (this will continue),” Mr. Bautista said.

Aside from introducing new models for TMP, the company is also supporting its auto business by venturing into used car auctions. Its unit, GT Mobility Ventures, Inc. has recently partnered with auction house operator Japan Bike Auction Co., Ltd. to form JBA Philippines.

The auction house business is scheduled to start operations by the third quarter of the year. Mr. Bautista expects the unit to start contributing to revenues by 2020.

The company also expects it banking unit, Metropolitan Bank and Trust Company, to continue its strong growth, especially on loan financing.

The property business, through Federal Land, Inc. and Property Company of Friends (Pro-Friends), is also seen to continue its growth momentum. Mr. Bautista earlier said they are aiming to grow property’s contribution to net income to about 15-20% in the next five years, against its 2018 contribution of 10.5%.

“The property momentum is strong, so we are hoping there will be a difference in the property side,” Mr. Bautista said.

GT Capital will be spending P51.7 billion in capital expenditures this year, bulk of which will be used at the parent level for its new ventures.

Federal Land cornered P12 billion of the spending, for land banking purposes and the construction of office buildings, while Pro-Friends will receive P2.3 billion to fund its expansion. Metrobank will get P2 billion for IT system upgrades and expansion, while insurance provider AXA Philippines will have about P200 million for computer and IT upgrade.

Shares in GT Capital slipped 4.89% or P44 to close at P855 each at the stock exchange on Wednesday.

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