LBC Express Holdings reported a net income after tax of P201.22 million in 2020, a 58% drop from 2019
Service revenues declined 7% as the COVID-19 pandemic affected retail and corporate customers locally and overseas
LBC intends to reposition services toward new consumer needs and behaviors, and innovate in view of accelerated consumer shift to e-commerce
LBC Express Holdings, Inc. reported a 58% decline in profit in 2020 due to lower revenues and higher operating expenses related to the impact of the COVID-19 pandemic.
LBC said its net income after tax in 2020 amounted to P201.22 million, 58% lower than the P475.82 million posted in 2019 due to a decline in revenues as its retail and corporate customers locally and overseas were affected by the crisis.
The decline was driven by a 7% shortfall in revenues; higher depreciation and amortization by 5% related to an increase in amortization of right-of-use assets and additional capital expenditures for new branches and warehouses; an increase in salaries and benefits relative to the manpower for new warehouses and branches; and an increase in operating expenses mostly related to the pandemic.
Service revenues reached P14.12 billion in 2020, a 7% decrease from P15.21 billion in the previous year, attributable to decreased demand during the worldwide lockdowns in the second quarter of the year.
LBC in a statement said its branches remained open and delivery services were operational despite the pandemic, but the company experienced extended lead times due to safety, security and varied travel restrictions.
Revenues were recouped in the third and fourth quarters of last year as consumer demand started to increase and operations to normalize, LBC noted.
Cost of services was reduced by 5% to P10.65 billion in 2020 from P11.26 billion in 2019 due to the lower volumes of acceptance in the second quarter. The cost of delivery and remittance likewise decreased by 13%, driven by the volume decline and more cost-efficient methods of transport implemented by the group.
To serve increased demand for courier and money services to support various nationwide quarantine scenarios, LBC said it continues to adapt and adjust its capacities and services and ensure the health and safety for its employees and customers.
The group noted that many initiatives and protocols were implemented in LBC branches since the pandemic began.
Last year, additional exchange warehouses were established to cater to the volume increases and to observe proper social distancing at all service locations. Additional roll-on/roll-off trucks were acquired to move shipments to the Visayas and Mindanao areas due to the reduced airline capacity and infrequent flights.
A pick-up service was also introduced for more options and convenience to customers, with 100% booked pick-ups served. Moreover, capacities and resources were reinforced by hiring additional manpower to ensure a continuous flow of operations.
LBC said the group has embarked on a recovery plan focused mainly on rebalancing and repositioning services toward new consumer needs and behaviors. It also aims to rapidly innovate its services and capabilities to leverage on the accelerated shift of consumers to e-commerce.
With this, LBC said it has been expediting its digital services both for retail and corporate customers.
The group currently has a network of over 1,500 branches in the Philippines, over 300 hubs and warehouses, and thousands of partners and agents in over 30 countries.