Home » Maritime » High fuel costs drag Nenaco first-quarter net income

DOMESTIC shipping operator Negros Navigation Co’s (Nenaco) net income fell 38% to P47.3 million in the first quarter of the year against last year due to higher costs, particularly fuel prices.

Fuel prices rose to almost 50% this year compared to last year, causing operating expenses to swell 39%.

Revenues, however, grew 25% to P623 million from P500 million in the same period in 2009 due to the strong passage and freight businesses.

Passage volume expanded 45% and cargo volume by 39%, the latter helped in part by the launch of the door-to-door NN Freight service.

Nenaco chair and chief executive Sulficio Tagud, Jr said Nenaco operated on a limited capacity in the first quarter with four of its vessels under maintenance and drydocking.

“Now that our entire fleet is fully operational, coupled with the growing demand, we are very optimistic about the remaining months of the year,” he added.

Earlier, Nenaco said it was only looking at a 4-7% increase in passage and cargo volume this year with traffic remaining erratic.

This year, the shipping line will acquire at least two combo vessels worth $20 million, each able to carry about 2,000 passengers and 150 containers.

Nenaco has emerged from corporate rehabilitation, four years ahead of schedule, after posting profits for three consecutive years.

The carrier is owned by KGLI-NM, a joint venture company between Negros Holdings Management Corporation and KGL Investments of Kuwait.

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