LBC Express on track to exceed core profit target for this year

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By Arra B. Francia, Reporter

LBC EXPRESS Holdings, Inc. may exceed its core net income target for this year by as much as 5%, a top official said on Tuesday.

LBC Investor Relations Officer and Acting Chief Finance Officer Enrique V. Rey, Jr. said the company is banking on its fourth quarter performance to help push its core profit beyond the initial target of P985 million.

“If you see our first half based on our guidance, we’ll probably overshoot our target by 3-5%. Right now we’re on the lower (side), so the first half is usually slower for us. So our mid-year numbers just on a straight line, we’re already hitting our guidance on revenue and net income,” Mr. Rey told reporters after LBC’s annual shareholders meeting in Pasay City.

The listed logistics and money services firm had earlier announced a core profit guidance of P985 million, which is 7% higher than the P920 million recorded in 2016.

For revenues, Mr. Rey said the target is P9.8 billion. In the six months ending June, LBC generated revenues of P4.91 billion, 19% higher year on year.

LBC is looking to tap new partners that would allow it to complete its supply chain.

“We’re talking to both local and foreign. We have been for the last three to four months, regional player and local player. We’re looking for companies that are similar in what we do, increasingly in the limelight most likely because of e-commerce. There are other activities that other people don’t even know they need,” Mr. Rey said.

The company is also banking on the growth of the country’s logistics sector to help propel LBC forward, especially with the rise of the e-commerce industry and the increasing number of small to medium enterprises in need of delivery services.

“For now, the company is targeting to open 100 branches locally to add to its current network of 1,200 branches located both here and abroad, in addition to 4,100 partners and agents.”

“Our focus is strengthening the retail base at the local level. There’s a lot of development in the country… We’re usually the first to come in in small communities. So we see a lot of lower-tiered municipalities, barangays beginning to flourish,” Mr. Rey said.

To finance its expansion, LBC received shareholder approval to issue $50 million in secured convertible notes, which are set to mature in seven years, to CP Briks Pte. Ltd.

The plan to issue the convertible instruments comes after the Securities and Exchange Commission (SEC) rejected its application to conduct a follow-on offering amounting to P779.6 million through the sale of 69.1 million common shares.

The SEC rejected the offer due to pending cases filed by the Philippine Depository Insurance Corp. against its now defunct banking unit, LBC Development Bank, Inc. for its supposed unsound management.

Mr. Rey said the company will be revising the prospectus and registration statement with the SEC in order to proceed with the offer.

“We will look at the structure of the offer, in terms of the price, and amount. Right now, what we’ve filed is up to P17. Our intention in the refiling process was to up the share price, considering the earnings per share is much better this fiscal year. However, we’re looking at the offer price and offer size. So before we file the follow-on, restructure the prospectus,” he explained.

Mr. Rey also said the company has provided the SEC with more information on the cases it is facing.

Shares in LBC closed at P15.4 apiece at the stock exchange on Tuesday, lower by 10 centavos or 0.65% from the previous trading day.