Domestic carrier Lorenzo Shipping Corporation (LSC) reported a wider net loss of P174.461 million in 2019 from the P146.113 million net loss in 2018.
The bigger loss was posted despite a 49% increase in freight revenue to P2.944 billion from P1.971 billion in 2018, according to LSC’s disclosure to the Philippine Stock Exchange.
Ocean freight revenue was 38.6% higher in 2019 at P1.914 billion versus P1.381 billion in 2018.
Revenues from port charges leaped 212.6% to P673.628 million from P215.458 million while storage revenues rose 32% to P12.234 million from P9.258 million.
Revenues from trucking, however, fell 6% to P344.353 million from P366.034 million.
Direct costs went up 51% to P2.913 billion last year from P1.924 billion in 2018.
LSC has been implementing its turnaround plan—noting the benefits reaped as shown in the significant improvement in its direct costs—until the end of 2019. Reporting net losses since 2015, LSC has started to post lower losses from 2017 up to the first nine months of 2019.
The same plans, being implemented for years now, include enhancing partnerships with select carriers for flexibility, especially in cases of excess volumes or service disruptions; and maximizing vessel capacity, especially for northbound volumes, using improved pricing schemes.
LSC will also continue to reduce operating costs for trucking, terminal operations, and cargo handling 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.
Meanwhile, LSC said it “remains fully operational and committed in delivering on its promises to clients and partners” despite the ongoing coronavirus disease (COVID-19) pandemic.
Shipping operations to and from the ports of call that the company serve, 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 it enacted risk mitigation and business continuity protocols and has put in place other work arrangement options to limit exposure of employees to COVID-19.
LSC said it cannot fully determine yet the impact of the pandemic on its financial position, performance and cash flows as the pandemic is evolving in nature, only noting it “could have a material impact on its 2020 financial results.”
“While the present disruptions can slow down revenue inflows, the safety and security measures immediately adopted by the company and the cost reduction during the quarantine period are expected to mitigate the unfavorable impact on business,” LSC said.
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 the efficient handling of customers’ cargoes, including land-based forklifts, top lifts, trucks, container yards, and warehouses at its branches and agencies.
