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Lorenzo Shipping reported a net income of P130.48 million in the first half of 2023, a reversal from the P105.20 million net loss year-on-year
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The profit resulted from maximizing margins and mitigating unnecessary expenses, the company said
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LSC handled 13.73% less containers in the first half of 2023 due to fewer voyages attributable to a slowdown in domestic consumption during Q2
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LSC said it is embarking on maximizing freight margins combined with cost rationalization as expenses continue to increase through general inflation, currency depreciation, and disbursements
Lorenzo Shipping Corp. (LSC) sailed to profitability in the first half of the year, reporting a net income of P130.48 million, a reversal from the P105.20-million net loss posted in the same period in 2022.
The company ended the first half with a gross profit of P293.93 million, a P314.21-million growth vis-a-vis the same period in 2022. “The gross profit stems mainly from vastly improved margins from optimized vessel routes and cargo mix combined with ongoing initiatives at cost-efficiency,” LSC said in a regulatory disclosure.
Total revenues for the first six months of the year amounted to P1.76 billion, 12% higher year-on-year from P1.57 billion. Freight adjustments in the fourth quarter of 2022 to the first quarter of 2023 supported the increase, the carrier said.
Revenue growth was achieved despite a 13.73% year-on-year decline in containers handled in the first half of 2023, a result of fewer voyages attributable to a slowdown in domestic consumption during the second quarter.
Direct costs were 8% lower to P1.46 billion from P1.59 billion as cost of services decreased by 9%.
LSC said it is embarking on maximizing freight margins combined with cost rationalization amid increasing expenses brought on by general inflation, currency depreciation, and disbursements such as bunkering, trucking, tuggage, inevitable empty repositioning, and maintenance of vessels and equipment.
With domestic consumption being unpredictable, LSC said “emphasis will be given to the flexibility of operating strategies without sacrificing discipline and excellence.”
The domestic carrier said its plan of operation for the second semester of the year includes vigilance on vessel and equipment maintenance and service reliability to improve customer experience on cargo deliveries remain as top priority.
LSC will also focus on maximizing yield per container per voyage to offset the escalation of various expenses and other inflationary effects, and will continue with process improvements and innovation to significantly contribute to more efficient operations.
Also part of the plan are closely monitor billing, collection, payables, and other obligations to ensure continuous support of vendor services; paying close attention to land- and sea-based employees’ physical, mental, and emotional welfare to maintain high morale and maximize productivity; and undertaking risk-mitigation measures and continuously strengthen statutory compliances to diminish service disruption and guarantee business continuity.
LSC reported a net income of P18.60 million in 2022, its first reported annual income since the domestic carrier started posting annual losses since 2015.
LSC operates nine vessels that call 10 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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