Lorenzo Shipping books first annual profit since 2015

Lorenzo Shipping books first annual profit since 2015
Photo from Lorenzo Shipping Corp.
  • Lorenzo Shipping Corp. has turned around to net income of P18.6 million in 2022 from net loss of P84.58 million in 2021
  • It is LSC’s first annual profit since the domestic carrier started taking annual losses in 2015
  • 2022 freight revenue was P3.3 billion, 15% higher than the P2.87 billion top line in 2021

Lorenzo Shipping Corp. (LSC) reported its first annual profit since 2015, booking a net income of P18.6 million in 2022, a reversal from the P84.58 million net loss in 2021.

Freight revenue in 2022 amounted to P3.3 billion, 15% higher than the P2.87 billion cargo revenue in 2021, the domestic carrier said in a regulatory disclosure. Gross profit likewise soared 355% to P234.39 million from P51.46 million in 2021.

The carrier attributed the increase in freight revenue to a series of cost-recovery initiatives that resulted in an increase in freight per twenty-foot equivalent unit (TEU) container.

Total operating expense in 2022 rose 9% to P3.06 billion from P2.82 billion in 2021. General and administrative expenses, meanwhile, climbed 31% to P186 million from P142 million.

Despite cargo volume significantly increasing in 2022 compared with the pandemic years of 2021 and 2020, LSC said it faced the enormous challenge of recovering from the drastic escalation in costs brought about by unstable fuel prices, elevated inflation, peso depreciation, high interest rates, and inefficiencies brought about by port congestion.

The company said the first three quarters of 2022 were focused on various strategies aimed at overcoming these difficulties to ensure viable operations. These initiatives bore fruit in the fourth quarter as LSC began showing signs of recovery “with the hope that it could be sustained in the succeeding years.”

“It is with great pride to declare that LSC has endured and is now recovering,” LSC president and chief operating officer Reynold John Madamba said in a message for LSC’s sustainability report for 2022.

“The collective efforts of everyone: land-based, sea-based, our providers, partners, affiliates, management team, and the board, greatly contributed to this success.

“I have full confidence that we have all the elements in place to carry on as we continuously seek to improve and build on this achievement,” Madamba added.

LSC’s strategy this year includes continuing reliable vessel schedule and consistency of services as one of the top priorities, as demand increases along with growth in domestic consumption.

Load factor optimization and yield management, which are critical in ensuring positive margins, will also be pursued. Continuous improvement, process enhancement, and quality assurance solutions are being conceived and implemented to certify maximum efficiency.

The company will also continue activities directed at developing the skills and talent of personnel, which should contribute greatly to the motivation and general well-being of the workforce.

LSC has an ongoing drive for innovation and digitalization to guarantee productivity and elevated customer experience.

Part of the plan is the establishment of statutory compliance and risk-mitigation measures to ensure sustainability.

LSC operates nine vessels that call 10 at major ports in the country. It has evolved from being a provider of port-to-port and door-to-door services for full container load and less-than-container-load shipments into a solutions provider company capitalizing on the logistics strengths of its affiliates.

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