GT Capital 9-mth profit down 18%, still bullish on 2014 growth target

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GT Capital Holdings Inc., the listed holding firm of tycoon George Ty, remains confident it will meet its 2014 net income growth target despite a double-digit drop in earnings in the first nine months.

“Last year was a high year. I don’t think we can reach the growth levels last year, but I think a decent growth level from low to mid teens for net income will be acceptable,” said GT Capital president Carmelo Maria Luza Bautista on the sidelines of the company’s third-quarter earnings briefing on Thursday.

For the nine months to September, the company saw its net income drop 18 percent to P6.3 billion from last year’s P7.7 billion, dragged down by the weak performance of its banking unit Metropolitan Bank and Trust Company (Metrobank).

Revenues, on the other hand, rose 37 percent to P104.9 billion from P76.8 billion a year ago on the strong performance of Toyota Motor Philippines (TMP) and Global Business Power Corp. (GBPC), which accounted for 50 percent and 14 percent, respectively, of the company’s revenues.


For the third quarter alone, the company’s net income jumped 46 percent to P2.4 billion from P1.6 billion last year, while revenues grew 40 percent to P38.8 billion from P27.7 billion.

The major net income contributors for the nine-month period were Metrobank (40.3 percent), TMP (30.8 percent), Federal Land Inc. (13.2 percent), GBPC (10.9 percent). The rest came from GT Capital’s auto, life and non-life insurance businesses.

Bautista said that in the next two to three years, the company is looking at an income breakdown of “30 percent share each for Metrobank and Toyota” and “maybe 15 percent each for Federal Land and power unit GBPC.”

He said the firm is looking at a sustained performance of the automotive sector through Toyota, as well as short- to long-term expansion plans in power and property development.

Bautista said the company is likewise looking to participate in the bidding for public-private partnership (PPP) projects of the government.

For power unit GBPC, Bautista said the company will go into building biomass and geothermal plants. At present, the company “is in talks with strategic partners” to build a 40-megawatt biomass power plant.

“Biomass and geothermal are renewable, so we are closely looking at that,” he said.

The planned 40 MW biomass plant will boost GBPC’s current capacity of about 747 MW, inclusive of the recently switched 82 MW Toledo plant.

Bautista said the property unit Federal Land is looking at “opportunities in expanding into horizontal” projects.

“We are looking at opportunities to expand into horizontal developments with our property sector, as well as the retail segment with strategic partners who have best practices in this sector,” Bautista said.

For PPP projects, the company said it is interested in “transport and infrastructure” projects, as it already bought pre-qualification bidding documents for the Light Rail Transit (LRT) Line 2 project.

“If you look at [LRT] Line 2, there are a lot of interesting opportunities there. The most interesting is the extension to the east in Antipolo. It’s a high density project. If those two stations will be completed, the ridership will improve and if the ridership improves, the property side also improves,” Bautista said, noting synergies of the group with its property business in bidding for PPP projects.

The LRT 2 project involves the operation and maintenance of 11 stations of the 13.8-kilometer LRT 2 from CM Recto Ave. in Avenida, Manila to Santolan in Pasig City, as well as the proposed P9.7-billion extension plan to add two stations on a 4.19-kilometer stretch all the way to Masinag in Antipolo City.

The extension to Antipolo is expected to increase the current 200,000 daily passengers when LRT 2 will link the cities of Manila, San Juan, Quezon City, Marikina, and Pasig.

“We also bought bid documents for the Laguna Lakeshore [project], but I think it’s somewhat delayed so we’re patient. We’ll just wait for the details,” Bautista said.

Incorporated in 2007, GT Capital is involved in banking (Metrobank), real estate (Federal Land Inc.), power (Global Business Power Corp.), automotive (Toyota Motor Philippines), insurance (Philippine AXA Life Insurance Corp.), and non-life insurance (Charter Ping An Insurance Corp.). Kristyn Nika M. Lazo

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