Integrated Philippine transport solutions provider 2GO Group, Inc. reported a 79% decline in net income to P120.1 million for the first half of 2017 from its P567 million income in the same period last year.
The decrease, 2GO said in a regulatory disclosure, was due to the recognition of non-recurring restatement adjustments to provide for bad debts and inventory and related party adjustments totalling P207.2 million, and to an increase in fuel prices.
Excluding the non-recurring restatement adjustments, net income would have been P327.2 million for January-June 2017 compared to P612 million for the same period in 2016.
Total consolidated revenues for the period, on the other hand, increased 14% to P11.1 billion from P9.8 billion in the first half of 2016. The non-shipping business consisting of logistics and supply chain solutions grew by 20% as various service upgrade initiatives were carried out and deliberate focus was given to growing key domestic and international accounts. The e-commerce business led growth in revenues with a 75% jump in earnings.
Similarly, 2GO’s distribution business increased by 45% as two new major principals were gained during the first half of the year. With the robust growth of the non-shipping business, revenue mix continues to tilt towards non-shipping, now accounting for 58% of the total turnover.
Shipping revenues, meanwhile, grew 7% as freight volume expanded by about 2,200 twenty-foot equivalent units “even though ships were affected by berthing congestions in its five major ports.”
“Freight is likewise affected by an over capacity in the freighter market due to the entry of many new players in the span of two years,” it added.
Passenger volume increased by more than 54,000 passengers for long-haul trips and more than 28,000 passengers for the short haul, resulting in an 11% increase in passage revenues.
Total costs and expenses jumped by 21% as fuel prices went up by 49% or P322 million over the same period last year. All other costs and expenses were generally kept at bay through improved efficiencies and stringent cost management.
Increases in other segments of the business came from cold chain and Isotank services, port services, and international freight forwarding, which grew 20%, 7%, and 39%, respectively.
After SM Investments Corporation and Udenna Corporation acquired shares in 2GO’s parent company, Negros Navigation Co., Inc., the new management is exploring synergies that will improve the overall operational performance of its various companies, 2GO said.
The new management is likewise looking at efficiencies and cost benefits from applying best practices to be shared within the group.
“With this new development at the parent company level coupled with the very stable economic environment, the new management is very optimistic that the growth of 2GO will reach even greater heights as we move forward to further grow the business and become an even stronger player from 2017 onwards,” 2GO said.
2GO and its subsidiaries offer a full range of capabilities and services including warehousing, inventory management, domestic and international express mail and courier services, sales distribution and merchandising, domestic freight services for full/ less container load shipments, Isotank, reefer and cold chain services, heavy lift and project logistics, regular liner passenger service, corporate/leisure travel and package tours, and international freight forwarding and brokerage.
