Chelsea Logistics Corporation (CLC) reported a 298% surge in net income for the first nine months of 2017 to P405.7 million, up from P102 million in the same period last year.
In a disclosure to the Philippine Stock Exchange, CLC said profit was derived primarily from its share in the net income of Negros Navigation Co., Inc. (NENACO) and 2GO Group, Inc. through its investments in Udenna Investments B.V. Udenna Investments in March acquired 28.15% indirect economic interests in total supply transportation solutions provider 2GO.
Revenues for the nine-month period grew 8.8% to P2.296 billion from P2.111 billion in the same period in 2016, owing to a 43% increase in freight revenues and despite a 4% decline in charter fee revenues.
Charter fees fell by P43.3 million or about 4% due to the change in charter agreements involving M/T Great Diamond (formerly Chelsea Thelma) and M/T Great Princess (formerly Chelsea Donatela). The two vessels were the subject of bareboat agreement entered into by the company with a Vietnam-based petroleum company effective November 2016 and March 2017, respectively.
Of the four types of charter agreements, CLC noted that bareboat charter yields the least revenue since all operational costs for the vessel are shouldered by the charterer instead of the ship owner on a cost-plus basis. In 2016, both M/T Great Diamond and M/T Great Princess were under the voyage charter type of agreement wherein all costs are shouldered by the ship owners; hence, revenue is largest as the costs are also high. The bareboat agreement entered into by the company is for a period of five years, renewable for another five.
The increase in freight revenues by 43%, meanwhile, arose from the commercial operations of M/V Trans-Asia 12 on the Manila-Cebu route. M/V Trans-Asia 12 started commercial operations on this route only in August 2016. In addition, M/V Trans-Asia 5 also underwent dry-docking in January 2016.
Revenues from passengers likewise improved 10% as the number of passengers went up.
Similarly, Tugboat fees improved, up by 15% as a result of increased port calls at Calaca Seaport (formerly Phoenix Petroterminals & Industrial Park), where calls rose by some 51% from 272 to 410. In addition, the full period’s operations of Fortis Tugs Corporation in Keppel Batangas contributed to the increase in tugboat fees. Fortis Tugs, a company under the CLC group, became the exclusive tugboat provider in Keppel Batangas in March 2016.
CLC estimates capital expenditures for 2017 to amount to P3.7 billion due to various acquisitions involving vessels and vessel equipment and the upgrade of facilities. The purchase or construction of these capital expenditures will be financed primarily through the proceeds from the company’s initial public offering and through debt.
CLC’s shipping transport business is comprised of wholly owned subsidiaries Chelsea Shipping Corp. (CSC) and Trans-Asia Shipping Lines, Inc. CSC carries petroleum products, goods, wares and merchandise by sea in the Philippines. Trans-Asia, meanwhile, transports passengers and cargo within Philippine territorial waters or on the high seas.
On November 8, CLC acquired all of the outstanding shares of stock of Worklink Services, Inc. (WSI), a total logistics management company that provides ground courier, sea freight, and air freight services across the country. WSI also offers trucking, warehousing, and special projects management services such as events management, manpower provision, trade merchandising, and drop box management.
READ: Logistics firm Worklink is Chelsea Logistics’ latest acquisition
Last October 26, CLC’s proposed acquisition of domestic ferry operator Starlite Ferries, Inc. was approved by the Philippine Competition Commission.
Image courtesy of Stuart Miles at FreeDigitalPhotos.net
