OT Lapital expects flat earnings growth this year

GT Capital Holdings, Inc. expects to book about P3-4 billion in net income during the fourth quarter, for an overall flattish growth in 2018.

“We expect P3 to 4 billion in the last quarter. If ever, hindi lalayo sa P14 billion (net income). Flat ‘yun,” GT Capital President Carmelo Maria Luza Bautista told reporters after the company’s third quarter media briefing in Makati last week.

GT Capital’s consolidated net income attributable to parent stood at P14.18 billion in 2017, 3% lower than the P14.63 billion in 2016.

Mr. Bautista noted that the flat growth is similar to most conglomerates’ performance so far this year, weighed down by the negative market sentiment.

“In fact most conglomerates are either flat or 1%, karamihan nga negative. So it’s really the overall market sentiment,” he explained, citing rising oil and food prices as well as higher interest rates as the factors affecting consumer confidence this year.

The holding firm of tycoon George S.K. Ty however sees faster growth in 2019, as the factors that dampened consumer confidence this year are showing signs of recovery.

“Now we’re seeing the reverse. Oil prices have been significantly adjusted, so that translates to cheaper fuel, cheaper electricity, everything is fuel based eh. And then food prices are stable,” Mr. Bautista said.

In particular, Mr. Bautista said they expect GT Capital’s banking unit, Metropolitan Bank and Trust Company, to boost operations next year.

For the first nine months of 2018, GT Capital grew its attributable profit by 6% to P3.8 billion, versus the P3.58 billion it posted in the same period a year ago. Revenues slipped by 2% to P60.18 billion, weakened by auto sales which fell 12% to P47.94 billion.

Meanwhile, Mr. Bautista said there will be a slowdown in project launches for Federal Land, Inc. in 2019, following its more aggressive approach this year.

“We just did eight projects for Federal Land... I don’t think we will do another eight projects next year,” he said.

Federal Land’s project launches this year include the Florida Sun Estates-Orlando in General Trias, Cavite; the Mimosa Tower of Peninsula Garden Midtown Homes in Paco, Manila; Baler Tower of Palm Beach West in the Bay Area; Quantum Residences in Pasay; Four Season Riviera Peony Tower in Binondo, Manila; and Valencia Hills Tower E in Quezon City.

The property developer also unveiled the South Tower of Grand Hyatt Manila Residences and Sunshine Fort, both in Bonifacio Global City.

With this developments, Federal Land managed to maintain its reservation sales at P1 billion per month, with year-to-date sales at P9 billion.

The project launches in 2019 may include Federal Land’s partnership with the SM Group for a residential condominium in Makati through ST 6747 Resources Corp.

“Most likely, I think they’re still finalizing the architectural plans. But that will be soon,” Mr. Bautista said.