A market slowdown cut the cargo volume handled by listed Philippine domestic carrier Lorenzo Shipping Corp., leading to a net loss of P18.153 million in the first half of 2015 from a net income of P9.504 million in the same period last year.
Net loss in the second quarter alone increased to P44.489 million from P21.134 million net loss in the second quarter of 2014, Lorenzo disclosed to the Philippine Stock Exchange.
“Due to market slowdown, cargo volume went down to 38,536 TEU (twenty-foot equivalent unit) this year from 42,073 TEU last year,” Lorenzo said.
Revenue in the first half reached P1.114 billion, a 1.06% decline from the P1.126 billion earned in the same period last year.
For the months April to June, however, revenue increased 21.3% to P563.137 million from P464.337 million in the same period last year.
Cost of services rose 6% to P923.6 million for the first six months compared with P875.2 million last year due to an increase in co-loading expenses incurred this year as a result of low cargo volume. Co-loading expenses amounted to P81.4 million in 2015, up 165.1% from P30.7 million in 2014.
Earlier, Lorenzo president Roberto Umali said four vessels were scheduled for dry-docking this year, and the carrier has entered into co-loading arrangements with other liners to compensate for the reduced vessel sailings.
Cranage expenses likewise went up to P33.6 million in the first half from P8.1 million due to increased cranage rate, Lorenzo noted. Umali also said the company is working closely with the operators of Manila North Harbor and Cebu port on having fixed berthing windows. Umali said that this will entail added cost, but that using the gantry cranes will result in faster loading and discharging of containers, faster delivery of cargoes to consignees, and over the long term, minimize the maintenance costs of vessel cranes. Also, crane rates in Manila North Harbor had increased 18% since last year.
Trucking expenses also grew to P224.4 million in 2015 from P145.8 million last year due to an increase in trucking rates as a result of the port congestion.
Lorenzo has allocated P600 million for capital expenditure this year that will be used in land-based equipment facility acquisition and dry-docking of vessels. The domestic carrier expects to handle 90,000 TEUs this year, up 5.2% from the 85,521 TEUs it carried last year.
Umali said Lorenzo will still be implementing the three success drivers it identified last year, which are to increase productivity, reduce costs, and quickly respond to changes in customers’ requirements.
He added that the carrier will continue to synergize with other transport and logistics providers to provide a total logistics experience to clients. Umali said competition remains tough in the domestic shipping industry, and it is “a challenge for us to protect our existing 10% market share.”
