Lorenzo Shipping cuts Jan-Sept loss to P78M as volume grows

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  • Lorenzo Shipping Corp posted a net loss of P78 million in the first nine months of 2021, lower than the P113 million loss recorded year-on-year
  • Freight revenues grew 11% as cargo volumes increased 5.24%
  • LSC remains hopeful of bouncing back in the fourth quarter

Domestic carrier Lorenzo Shipping Corp. (LSC) posted a net loss of P78 million in the first nine months of 2021, lower than the P113 million net loss recorded in the same period in 2020.

Freight revenues for the first nine months of the year amounted to P2.164 million, 11% higher than the P1.948 million booked year-on-year, LSC said in a regulatory disclosure.

Cargo volumes handled from January to September this year were up by 5.24% from the same period last year.

Gross profit reached P24 million, a departure from the -P24.6 million last year.

Direct costs, on the other hand, increased 9% to P2.140 million from last year’s P1.972 million due to increases in cargo volumes handled, higher fuel price and consumption, and proportionate increases in service voyage expenses and other direct costs.

General and administrative expenses were P106.9 million, 37.4% higher than last year’s P77.8 million.

LSC said it engaged in sustainability strategies that resulted in positive income during the first quarter, but earnings slowed down during the second quarter with the reimplementation of the enhanced community quarantine in mid-March.

It said the third quarter was the most challenging as the decrease in economic activity and freight volumes combined with continued substantial increases in the cost of fuel.

“These factors heavily affected profitability as the company remains hopeful of bouncing back in the fourth quarter,” LSC added.

It said plans and programs will be maintained to prepare for the increase in domestic consumption as the pandemic situation improves.

LSC said vessel and service integrity remains one of its primary goals, as the peak season for cargoes is expected during the months of October to December.

Revenue and cost recovery, such as fuel surcharges and pass-on of tariff adjustments, will also be pursued to keep pace with rising expenses, while resources and operating costs will be rationalized to achieve efficiency and economies of scale.

The physical, emotional, and mental well-being of the workforce is also a priority, and LSC said it will apply business continuity measures, meticulous risk mitigation, and environmental, social, and governance compliance to achieve sustainability in 2021 and beyond.

LSC operates a fleet of nine vessels deployed to key ports in Manila, Visayas and Mindanao. The carrier’s vessels have a capacity ranging from 300 twenty-foot equivalent units to 797 TEUs with speeds of 11 knots to 15 knots.

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.