Chelsea Logistics and Infrastructure Holdings Corp. (CLC) expects to start recovering from losses sustained from the COVID-19 pandemic by middle of next year.
CLC, in a statement, said this recovery will come as a result of measures taken to mitigate the impact of the pandemic on its operations. Its logistics business, which is benefitting from the surge in e-commerce deliveries, is also expected to help it bounce back.
CLC and its subsidiaries reported a net loss of P1.286 billion in the first half of 2020, a reversal from the net profit of P308 million during the same period in 2019. The loss is due to the community quarantine measures imposed by the Philippine government starting March 15, 2020 to contain the health crisis. These lockdowns affected their operations by restricting land, sea and air travel and allowing only the delivery of essential goods.
READ: Chelsea Logistics tumbles to P1.3B net loss in 1H 2020
The company said it sees signs of recovery for its shipping business in 2021 and a positive cash flow by early to mid-2022.
CLC said it has deferred most of its capital expenditures this year—except for those already committed and started—to mitigate the impact of the ongoing pandemic. The company has also continued to dispose of idle and inefficient assets, and has implemented a workforce rationalization program.
Moreover, CLC availed of the extension periods for loan payments as provided for under Republic Act (RA) No. 11469 (Bayanihan 1) and RA 11494 (Bayanihan 2) to ease its cash flow.
During its October 7 meeting, CLC announced an increase in its authorized capital stock from P2 billion to P3.5 billion, which will be divided into 3.49 billion common shares and 10 million preferred shares, both with par value of P1 per share. CLC said this increase will give it “greater flexibility and optionality for any equity raising to finance current and future projects as well as for additional working capital needs.”
CLC president and chief executive officer Chryss Alfonsus Damuy also noted that in contrast to the challenging situation in the shipping industry, the company’s logistics business is growing, benefiting from the surge in e-commerce and demand for advanced mobile applications and banking solutions.
CLC earlier said that when the community quarantine limited its shipping operations, the company intensified its logistics services to cater to other products other than those it normally handled, also transporting fast-moving consumer goods and medical supplies across the country. The group’s logistics arm, Worklink Services, Inc., also continues to address the demand and requirements for logistics services, particularly for specialized and efficient delivery service.
An expected significant cash flow generator is its investment in a 2.5-hectare logistics warehouse which will be completed by the first quarter of 2021, the company said.
With these measures, Damuy said they are “in the best position to bounce back faster once economy improves and businesses will be operating [under] the new normal.”
