Domestic carrier Lorenzo Shipping Corp. (LSC) brought down to P75.434 million its total comprehensive loss in the first half of 2020, 56.5% less than the same period last year’s P173.516 million.
Revenues for the first six months of the year amounted to P1.34 million, 8% lower than in 2019, LSC said in a regulatory disclosure. This is due to 9% less container volumes handled year-over-year primarily due to lockdowns imposed in response to the coronavirus disease (COVID-19) pandemic.
Still, the company posted a gross profit of P8.85 million, a reversal from the gross loss of P63.3 million for the same period last year.
Reporting net losses since 2015, LSC started to post lower losses from 2017 up to the first nine months of 2019. However, its net loss widened to P174.461 million in 2019 from -P146.113 million in 2018.
Total direct cost in the first six months of 2020 declined 12% to P1.331 billion from P1.514 billion last year. In particular, fuel expenses decreased by P86 million or 25%, while voyage service fee and cargo expenses dropped by P45.9 million or 25% and P35 million or 5%, respectively.
LSC said it will continue to implement its turnaround plan until the end of 2020, noting significant improvement to its direct costs.
Executed for years now, the turnaround plan includes enhancing partnerships with select carriers, especially in cases of excess volumes or service disruptions; and maximizing vessel capacity, especially for northbound volumes, using improved pricing schemes.
Operating costs for trucking, terminal operations, and cargo handling will be reduced through a focused and flexible organizational structure and appropriate technology.
Programs to manage profit leakage are also being implemented, focusing largely on claims reduction and improved billing and collection cycle through people, process, and technology intervention.
LSC said it “remains fully operational and committed in delivering on its promises to clients and partners” despite the ongoing pandemic.
Shipping operations to and from the ports of call that the company serves, including Manila, Cebu, Bacolod, Iloilo, Dumaguete, Davao, Cagayan De Oro, Zamboanga, Cotabato, and General Santos, will sail as scheduled with minimal to no service disruption.
LSC said this is because it has enacted risk mitigation and business continuity protocols and put in place other work arrangement options to limit exposure of employees.
While still unable to determine the impact of the pandemic on its financial performance, the company acknowledged the crisis could have “a material impact” on its 2020 financial results.
LSC owns and operates container vessels deployed to key ports in Manila, Visayas and Mindanao. It also owns various types of equipment as well as facilities for handling cargoes, including land-based forklifts, top lifts, trucks, container yards, and warehouses at its branches and agencies.
