LBC ‘on track’ to hit FY revenue goal, exceed profit target


LBC Express Holdings Inc. said on Thursday it is “on track” to achieve its 2016 revenue goal of P8.5 billion and may surpass its P1 billion net income target on the back of its robust logistics business and cost efficiency initiatives taken.

Enrique Rey Jr., LBC acting chief financial officer (CFO) and investor relations officer, told reporters that their bullish forecast is based on the strong year to date performance of LCB’s logistics and money remittance businesses and the fourth quarter being a traditional “peak season” for the company.

LBC reported Thursday that its net income in the first nine months of the year surged 57 percent to P895 million from P571 million in the same period a year earlier, while revenues grew 11 percent to P6.4 billion from P5.7 billion a year ago.

For the third quarter, it said net income jumped 95 percent to P292 million from P150 million a year ago while revenues improved 13 percent to P2.2 billion from P1.9 billion previously.

“So on the revenue side, we’re on target while for the net income, we’re slightly ahead,” Rey said.

Robust profits were driven by cost efficiency initiatives and sustained growth in its corporate logistics business. LBC said about 87 percent of the nine-month revenue came from its logistics business, composed of corporate and retail segments, while 13 percent came from its money remittance business.

Rey said the corporate logistics segment grew 25 percent to 30 percent during the nine months, while retail logistics improved 6 percent mainly on strong air cargo operations.

“LBC’s strong financial performance for the third quarter was driven by the company’s focus on expanding our portfolio of business solutions simultaneous with our push to continuously improve our express delivery service.
It’s a trend that we see continuing as we move into the last quarter of the year, which is typically the industry’s peak season,” LBC chairman Mike A. Camahort said.

P1.17-B follow-on offer next year

LBC is also pushing ahead with a follow-on offering to raise P1.17 billion in fresh funds in the first quarter of next year to fund expansion plans and to complete its listing on the stock exchange. LBC used the backdoor route to enter the local stock market last year, using Federal Resources Investment Group Inc. as its vehicle.

“We’re targeting to file [with the Securities and Exchange Commission]by the end of the month, which brings the retail offering period to the first quarter of next year,” the Camahort said.

The company is targeting to sell 10 million primary shares and 59 million secondary shares for a maximum price of P17 each. The offer shares are equivalent to about 10 percent public float for the company.
Rey said LBC is confident that the share sale would be subscribed at a healthy rate.

“We don’t see political risk at this point in time. The offering, we consider it at a lower range. We have yet to see if they would increase that but for now, we’re looking at that value. Moving forward, we would most likely increase the offering. But for now, we just want to set that target date so that we can finally finish off the backdoor process.”

The proceeds of the share sale would go to branch expansions domestically and in the Middle East, as well as further fuelling the logistics business and investing in the import-export business and IT infrastructure systems.
The company targets 60 branch openings for 2016. To date, LBC operates 1,225 branches, 91 hubs, and 13 distribution centers in the Philippines alone.

For next year, Rey said the company is earmarking P300 million to P400 million to open about 70 to 80 branches.

Over the past two years, the company has catered to 16 million customers worldwide, with 3 million balikbayan boxes processed and delivered since 2013.

LBC is engaged in logistics and money transfer services. Aside from its operations in the Philippines, it has branches in various locations in North America, the Middle East, Asia Pacific, Europe and Oceania.


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