Philippine supply chain company Chelsea Logistics Holdings Corp. (CLC) has reported a net profit of P161 million in 2017, or 22% higher than the P137 million earned in 2016.
The net profit includes a one-time gain on bargain purchase amounting to P158 million, but this was tempered by the almost 100% increase in financing costs attributable to loans availed of to buy some new vessels, CLC said in a statement.
For the full-year 2017, CLC generated P3.9 billion in revenue, a 140% growth from 2016. CLC said this was mainly attributable to the acquisition of a significant stake in total logistics provider 2GO Group, Inc., and the acquisition of 100% ownership of Starlite Ferries, Inc. and Worklink Services, Inc.
These acquisitions resulted in additional freight revenues of P1.3 billion, passage revenues of P800 million, and P2 million revenue from logistics services.
Further, revenues from the tug assistance services doubled to P263 million in 2017 from P118 million in 2016 as a result of acquiring Davao Gulf Marine Services, Inc., which contributed P121 million in total revenues.
“With the capital raised from our initial public offering on 8 August 2017, we were able to significantly expand our businesses and operations. As a result of the acquisitions during the last quarter of the year, we were able to increase our market share not only in the shipping industry but covering the end-to-end supply chain solution of the logistics industry,” Chelsea president and chief executive officer Chryss Alfonsus Damuy said.
In late 2017, CLC, through its subsidiaries, purchased four more vessels and ordered more during the first quarter of 2018, with expected deliveries within the year. Further, during the first quarter of this year, the company signed a contract with Kegoya Shipyard for the construction of a brand-new roll-on/roll-off-passenger (ropax) vessel, with an option to order three more units, with delivery dates from 2019 to 2020.
“We expect the benefits of the acquisitions of these vessels to be reflected in the profitability of the company beginning 2018,” Damuy said.
As of December 2017, CLC, with its 75 strong fleet, said it has captured a 33% share of the route market and 36% share of the ropax market based on gross registered tonnage (GRT). CLC said it remains the market leader at 14% in terms of tanker capacity by GRT.
Also last year, CLC acquired a significant stake in 2GO, which offers comprehensive logistics and travel services under the brands—2GO Travel, 2GO Freight, 2GO Express, and 2GO Logistics.
“We envision this move to pave the way for us to be the prime mover of goods and passengers by continuously innovating to provide solutions that are relevant, sustainable and adaptive to a fast-growing Philippine logistics and e-commerce industry,” Damuy said.
To date, through 2GO, CLC reaches 3,300 delivery points in the country, while with Worklink, the company is able to serve 59 provinces.
“We will pursue our expansion strategies and find best ways to complement the current business operations with the Build Build Build program of the Duterte administration. We intend to participate in the development of the infrastructure facilities and systems in the country, which includes but is not limited to airport and port development and operations and other related facilities,” Damuy said.
