Despite improved earnings, GT Capital not yet back to pre-crisis shape

The Ty-led conglomerate reported on Tuesday that consolidated net income grew 143% year-on-year to P6.7 billion in the January-June period, with so-called “base effects” from last year’s pandemic-induced slump magnifying the growth figure.
GT Capital/Released

MANILA, Philippines — Much like other Philippine companies, GT Capital Holdings Inc. booked higher earnings in the first half of the year, but it has yet to return to its pre-pandemic form.

The Ty-led conglomerate reported on Tuesday that consolidated net income grew 143% year-on-year to P6.7 billion in the January-June period, with so-called “base effects” from last year’s pandemic-induced slump magnifying the growth figure.

Despite the triple-digit jump, profits in the first half were still below pre-pandemic level. "GT Capital delivered strong results in the first half of 2021, which are approximately 80% of 2019 pre-Covid levels,” Carmelo Maria Luza Bautista, company president, said.

“Amid challenging conditions, the Group’s first-half performance demonstrates our inherent capacity to bounce back from the historic low levels of the past year, and in certain sectors, even optimize competitive strengths by gaining market share,” Bautista added.

First semester earnings were mainly driven by GT Capital’s banking unit, Metropolitan Bank & Trust Co. (Metrobank). Figures showed Metrobank’s six-month net income grew 28% to P11.7 billion on the back of “recovery in recurring fees” that cushioned the impact of weak loan demand. But some of the gains were also in the form of cash that the bank already had on hand, thanks to “significant reduction” in buffers against loan losses this year.

GT Capital’s automotive business, Toyota Motor Philippines, reported a consolidated net income of P3.5 billion in January-June period, up 235% year-on-year. Consolidated sales reached P63.7 billion, a 70% increase compared with the same period last year when lockdowns sapped car sales.

Meanwhile, net income of Federal Land Inc., the conglomerate’s property arm, went up 243% year-on-year to P587 million in the first half due to “continued construction activity and increased project bookings.” However, sales reservation skidded 28.6% year-on-year to P6.5 billion as there were no new project launches since last year.

Metro Pacific Investments Corp, where GT Capital has a 15.6% stake, recorded a consolidated net income of P6.0 billion in the first six months, up 13% on an annual basis as easing lockdowns brought more traffic to its toll roads while improving energy demand pushed up the earnings of Manila Electric Co. (Meralco), a subsidiary of MPIC.

However, GT Capital’s insurance segment, AXA Philippines, saw its consolidated net income sag 6.7% on-year to P1.4 billion in the first half due to “lower earned premiums and higher property and motor losses from the general insurance business”.

Shares in GT Capital ended flat at P530 each on Tuesday.

Show comments