Chelsea Logistics and Infrastructure Holdings Corp. (CLC) and its subsidiaries posted 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 significant downturn in group profitability is attributed to the community quarantine measures imposed by the Philippine government starting March 15, 2020, which restricted the travel of people via land, sea and air transport and only allowed delivery of essential goods, CLC said in a regulatory disclosure.
The group’s revenue for the first six months of the year reached P2.572 billion, a decline of 26% from P3.495 billion in the same period last year. All business segments showed a slowdown in revenue generation.
Passage, the segment most affected by the community quarantine, dropped by 42% to P427 million from P733 million in the first six months of 2019. Passage revenues included P150 million from The Supercat Fast Ferry Corporation for the period January 1 to March 15, 2020. In the second quarter of 2020 alone, passage revenue plunged 97% compared to the same quarter in 2019.
CLC noted that for the shipping industry, the second quarter of the year is historically the strongest, as business gets a boost from heightened domestic tourist activity with the onset of the summer vacation and holiday travel season. But this year, this peak tourist season did not happen, while regular travels of business commuters were also affected, CLC said.
Similarly, revenues from the freight segment fell by 26% to P968 million from P1.032 billion as movement of goods were limited to delivery of essential goods.
Tankering revenues went down 39% to P736 million from P1.215 billion due to less movement of petroleum products for the company’s base customers, which included those from the petroleum, airline, power and other industries affected by the pandemic.
Tugboat revenues slightly declined by 4% to P156 million from P163 million, while the logistics business posted a decrease of 29% to P159 million from P223 million.
Though most of the company’s vessels were laid up during the community quarantine period, cost of sales and services dropped by only 3% to P2.238 billion from P2.308 billion in 2019 because these costs are mostly fixed, such as depreciation and amortization, insurance and crew salaries, and employee benefits.
CLC earlier said that as shipping operations were limited by the community quarantine, it intensified its logistics services to cater to other products it did not normally service, such as 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 for logistics services, particularly for specialized and efficient delivery service.
Meanwhile, on the upcoming Davao Sasa Port and Davao Airport modernization projects, the group sees its revenues coming from shares in terminal fees, airport concessions, cargo handling and stevedoring, and docking charges.
CLC was granted original proponent status last year for its unsolicited proposal to modernize Davao Sasa Port, and its unsolicited operate-add-transfer proposal for Davao International Airport has also been approved by the National Economic and Development Authority Investment Coordination Committee.
CLC president and chief executive officer Chryss Alfonsus V. Damuy added that the group is in talks with possible partners with operations overseas, which could benefit the company’s shipping business.
In addition, the company is considering synergies with its existing services in tankering, tugboat assist and freight services.
