GT Capital posts 53% profit fall

Pandemic hampers operations of Ty-led businesses

GT Capital Holdings, Inc. reported a net income drop of 53% in 2020 to P7.4 billion, citing the effects of the coronavirus disease 2019 (COVID-19) crisis on the group’s businesses.

The consolidated net income of the listed conglomerate fell by 68% to P6.5 billion from P20.3 billion recorded in the previous year.

“Our year-end 2020 results show the full impact of the pandemic and the consequent lockdown that hampered the group to effectively only seven months of operations,” GT Capital President Carmelo Maria Luza Bautista said in a statement on Monday.

Banking segment Metropolitan Bank & Trust Co. contributed P13.8 billion in net income to GT Capital’s yearend results, while Toyota Motor Philippines Corp. generated a net income of P3.4 billion.

Consolidated revenues amounted to P134.4 billion, down by 40% from P222.9 billion in 2019.

Metrobank reported a 26% increase in income before provisions worth P61.8 billion in 2020, comparative figures were not disclosed. Full-year income amounted to P13.8 billion after booking provisions for future pandemic risks worth P40.8 billion.

“Metrobank’s core business remains solid and the bank looks forward to being a key partner in economic recovery. The bank will continue monitoring economic conditions and considering strategies that will maintain a balance between strong capital and optimal returns,” GT Capital said.

Meanwhile, Toyota’s consolidated net income amounted to P3.4 billion, dropping by more than 63% from P9.3 billion in 2019. Revenues fell by over 40% to P99.8 billion from P168.6 billion.

Toyota’s retail sales declined by 38% to 100,019 units from the 162,011 units sold in the previous year, but beating its estimated sales of 90,000 units. The company noted that it still outperformed the auto market, which declined by 41% in 2020.

The car dealer ramped up sales and marketing efforts after fully reopening in August. Digital showrooms and Toyota-owner apps were launched, while its service operations opened and offered services via appointment.

Five new models were also launched by the car brand every month from June to October, which “helped to significantly stimulate interest and demand for new vehicles.”

“Toyota is positioning itself for a resurgence of mobility requirements this year, including in the pre-owned car market,” Vince S. Socco, GT Capital Auto Dealership Holdings, Inc. chairman, said.

The company is expecting to benefit from a full 12-month sale this year, compared with 10 months of selling in 2020.

“As jobs, consumer confidence, and general economic activity in the country return, demand for motor vehicles is expected to rise,” Mr. Socco added.

Meanwhile, the consolidated net income of GT Capital property firm Federal Land, Inc. declined by 61% to P624 million from P1.6 billion as construction and sales activities were affected by quarantine restrictions.

Booked total revenues for Federal Land amounted to P9.3 billion in 2020, down by nearly 30% from P13.2 billion the previous year. Total reservation sales posted a 41% decrease to P14.2 billion from P24.2 billion.

“Lease revenues rose by 17% to P1.8 billion during the period, driven by new tenants in the developer’s commercial properties,” GT Capital reported without disclosing comparative figures.

The consolidated core net income of Metro Pacific Investments Corp. (MPIC) totaled P10.2 billion in 2020, falling by 34% from P15.6 billion a year earlier due to the economy’s contraction. GT Capital has a stake of about 16% in the infrastructure conglomerate. 

“The various quarantine measures implemented throughout the year reduced toll road traffic, mandated the suspension and subsequent reduction in ridership capacity for light rail services, and decreased commercial and industrial demand for water and power, resulting in a 26% decline in contribution from operations,” GT Capital said.

Power contributed P10.5 billion or 69% to MPIC’s operating income, water accounted for P3.1 billion or 20%, while toll roads generated P2.4 billion or 16%. Other businesses incurred a total loss worth P709 million.

Ty-led insurance company AXA Life Insurance Corp. earned a consolidated net income of P2.9 billion in 2020, improving by 22% from P2.4 billion the previous year. Its gains were driven by “higher single premium sales” of 55%.

Life insurance sales in annualized premium slumped by nearly 24% to P5.2 billion from P6.8 billion due to limited agent mobility and slowed bank branch foot traffic resulting from multiple lockdowns.

GT Capital remains optimistic for prospects in 2021.

“We are optimistic that despite the recent surge in Covid-19 cases, while alarming, will be mitigated once the pre-ordered vaccines are delivered by June and September. We have taken the necessary steps to procure the vaccines to protect all our employees and contractual staff. We anticipate that 2021 will be less disruptive than the previous year,” Ms. Bautista said.

GT Capital shares at the stock exchange improved by 2.88% on Monday to close at P535 from P520 per share. — Keren Concepcion G. Valmonte