LBC EXPRESS Holdings, Inc. posted a 63.6% drop in attributable net income last year to P494.57 million after it recorded a derivatives loss at a time when it was also adopting new accounting rules.

Its after-tax income was at P475.82 million for 2019, a 64.8% drop from the previous year’s P1.35 billion.

In a regulatory filing, the company said the lower income last year was “due to loss on derivatives attributable to the convertible instrument amounting to P642.51 million, lower foreign exchange gain by P127.50 million, and first time adoption of PFRS16” or new accounting rules, among others.

The company’s service revenues grew 23% to P15.23 billion last year due to the gains of its logistics and remittance business segments.

It noted a “continuous growth” in its domestic business mainly after opening 70 retail branches, launching of new products in mid-2018 and domestic retail price increase effective October 2018.

The company’s operating expenses rose by 14% to P2.25 billion, as its commission expense, which is mostly related to agents from international subsidiaries, “increased by P134.21 million during the year, traceable to North America entities which joined the group during the year.”

It also blamed the P129.06 million advertising and promotion expenses, higher by 41% from the previous year’s expenses.

Professional fee also increased by 45% to P90.79 million, covering payroll, tax and accounting consultancy fees.

On Wednesday, shares in LBC Express went down 2.22% to close at P13.20 apiece. — Arjay L. Balinbin