LBC back in the red on higher debt payments

MANILA, Philippines — Courier giant LBC Express Holdings Inc. sank in the red in the first quarter as it paid loans acquired in the latter half of 2023 and took on new debts to fund capital expenditures.

Based on its financial report, LBC Express incurred  a net loss of P9.84 million from January to March, a reversal of the P207 million profit it booked a year ago.

LBC Express saw its revenue decrease by four percent to P3.61 billion as its expenses went down by five percent to P2.82 billion.

Broken down, the courier’s retail revenue declined by eight percent to P2.77 billion, from P3.01 billion, attributed to the usual slowdown in logistics requirements in the first quarter. Meanwhile, income from corporate customers grew by 10 percent to P844.73 million.

LBC Express expects logistics demand to increase in the second quarter, as stores load up school supplies to prepare for the resumption of classes. The courier also records its biggest transactions during the holidays in the fourth quarter.

“The group’s operation tends to experience increased volume in remittance transmission, as well as cargo, throughout the second and fourth quarters of the year, particularly during the start of the school year and during the Christmas holiday season,” LBC Express said.

However, the company dipped into a net loss on the spike in its other expenses, particularly debt settlements, rising by nearly eight times to P216.3 million.

“Further, there is an increase in interest expense mainly from additional loans availed in the latter part of 2023,” LBC Express said.

The courier availed itself of loans totaling P150 million from BDO Unibank Inc. and P18.5 million from Union Bank of the Philippines before the end of 2023. As of March, LBC Express has paid P30 million of the loan taken from BDO.

In February, LBC Express borrowed another P5 million from UnionBank to support its working capital. When compared, the company’s interest expense went up by half to P42.45 million in the first quarter, from P28.26 million a year ago.

The positive note for LBC Express is that it is doing cost-cutting measures, reducing its expenses to mitigate the impact of servicing debt.

Recently, the courier has closed a number of its branches that were performing below standards to minimize business costs.