LBC Express Holdings, Corp. reported a net income of P548.95 million in the first half of 2019, a 54% drop from the P1.196 billion earned in the same period last year.
In a regulatory disclosure, LBC said the lower income was due to net loss from one of the acquired entities in 2018; lower foreign exchange gain; first-time adoption of a new accounting standard that led to higher depreciation and interest expenses; and the lower gain on derivative attributable to the convertible instrument compared to the same period in 2018.
Service revenues for the period increased 36% to P7.847 billion from P5.783 billion in the first half of 2018 principally due to growth in revenues from both the logistics and remittance segments by 27% and 11%, respectively.
LBC noted that growth of the company’s domestic business was mainly from the opening of 76 retail branches, introduction of new products mid-2018, and price increase effective October 2018.
Contributed revenue for the six-month period of businesses acquired from July 2018 onwards was around P1.92 billion, LBC noted.
Cost of services, meanwhile, was higher by 39% to P5.302 billion from P3.819 billion as cost of delivery and remittance rose 36% relative to the growth of volume in logistics and remittance services.
LBC is steadily expanding both its domestic and global reach. Overseas, it operates in more than 20 countries with a network of over 1,200 branches and a pool of 5,300 partner agents. From last year till this year, it has acquired, through business combination, 12 entities which are all located outside the Philippines, except for Quadx, Inc., which is home-grown.
This year, the company is spending about P200 million in capital expenditures to further expand its business, specifically investing in branch expansion and acquisition of equipment.
In the Philippines, LBC operates three main hubs for sea cargo, located in Manila, Clark, and Cagayan de Oro. It runs more than 70 delivery hubs, managing a team of 1,410 delivery associates and over 6,000 employees across the country.
LBC has been investing heavily in a three-year digital transformation program to further automate its processes and respond to changes in the logistics industry.
