Logistics and remittance service company LBC Holdings Corp. (LBCH) reported a net income of P1.349 billion in 2018, or 91% higher than the P707.92 million earned in 2017, partly due to the increase in gross profit brought in by higher volumes handled last year.
The group’s service revenues likewise jumped 25% to P12.514 billion last year from P10.020 billion as revenues from the logistics segment grew both in retail and corporate sales by 25% and 35%, respectively.
In 2018, LBCH expanded operations by acquiring one domestic and nine international entities engaged in money remittance and online and regular logistics services. Net contribution to revenue of these businesses amounted to P889.79 million or 36% of the total increase in revenue, LBHC said in a disclosure to the Philippine Stock Exchange.
The company said its domestic business also saw continuous growth, as evidenced by the opening of 76 additional retail branches and the introduction of new products in mid-2018 that had a total contribution of P123.67 million.
Improvement in the corporate/institutional segment of the group was also noteworthy, as the segment expanded its e-commerce-directed logistics and warehousing services, while likewise maintaining its annual growth of corporate/institutional accounts.
Cost of services, however, increased 30% to P8.564 billion from P6.606 billion in 2017 in relation to volume growth in logistics services, resulting in a 40% increase in cost of delivery and remittance. Direct cost was also significantly affected by the increase in fuel rates, largely due to the additional taxes imposed in compliance with the Tax Reform for Acceleration and Inclusion Law that took effect last year. The company noted how the higher taxes and fuel rates inclined carriers, airlines and truckers to enforce rate increases last year.
As of end-December, LBCH offers logistics services from 1,397 company-owned branches in the Philippines and 71 company- and affiliate-owned branches in 22 countries and territories worldwide.
LBCH has also heavily invested in a three-year digital transformation program to further automate its processes and respond to changes in the logistics industry.