Shipping and logistics company 2GO Group, Inc. and its subsidiaries incurred a net loss of P733 million in the first half of 2020, 113% higher than the net loss of P343 million posted during the same period in 2019.
Group revenue declined 18% in the first six months of the year to P9.089 billion year-on-year, primarily due to reduced economic activity stemming from the COVID-19 crisis.
Shipping revenue contracted 49% to P2.077 billion from P4.046 billion in the first half of last year, as travel revenues fell amid ongoing quarantine-related travel restrictions which began in mid-March.
Revenue from non-shipping (logistics and distribution) businesses decreased 1% to P2.712 billion from P3.358 billion owing to reduced transport and delivery volumes for several of the group’s logistics services, offsetting growth in the distribution business.
2GO said volumes slowed particularly in April and May, when most of the Philippines was under enhanced community quarantine. The group’s revenues increased in June when the National Capital Region and certain areas transitioned to general community quarantine, though revenues were still below 2019 levels.
For the first half of 2020, the shipping business accounted for 23% of total revenues and non-shipping businesses for 77%, compared to 36% and 64%, respectively, for the same period in 2019.
Amid weaker shipping and logistics volumes, the cost of services and goods sold in the first six months were 12% lower at P8.884 billion from P10.073 billion in the same period last year.
2GO also incurred about P89 million in COVID-19 related expenses for the first half of the year. This was mainly employee-related expenses for personal protective equipment, employee shuttle services, and allowances, as well as operating costs for two roll-on/roll-off passenger vessels which served as quarantine vessels during April and May.
The group foresees a decline in sales/revenue even in the subsequent months beyond the lifting of quarantine measures, as it expects the effects of the lockdowns to continue to limit business operations and economic activities.
During the first half of 2020, sales contracted 18.3% or about P2 billion year-on-year. 2GO said it expects collections, particularly receivables due from small and medium scale enterprises, to also suffer, which may necessitate making provisions for estimated losses.
2GO said it has already activated its business continuity implementation plan and taken steps to manage the risk of disruption in operations, even as it continues to monitor the domestic and international markets for developments that could impact its sales and operations.
