Lorenzo’s profit hit by cargo squeeze, rate war

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LISTED Philippine container carrier Lorenzo Shipping Corp. said revenue for the first half of the year fell 5.5% to P862.75 million from P912.89 million year-on-year as cargo volume contracted due to such factors as changes in client’s logistical and operational needs and rate cutting by new, small players.

As a result, net income for the first half of 2013 slipped 17.09% to P30.34 million from P36.59 million for the same period a year ago.

Revenues for the second quarter inched up 1.33% to P463.95 million from P457.83 million year-on-year.

Net income for the second quarter grew 10.46% to P23.08 million from P20.66 million.

Earlier, Lorenzo Shipping president Roberto Umali said the company is watching small rising competitors “who might be so aggressive in bringing down the rates just to get volumes and expand market shares. Maybe in the short term they (small rising competitors) will be able to get some cargoes, but we resist bringing down our rates just to respond to (a) freight war.”

Lorenzo owns a fleet of seven ships and calls at 10 major ports: Manila, Bacolod, Iloilo, Cebu, Dumaguete, Cagayan de Oro, Zamboanga, Davao, Cotabato and General Santos.

Photo from www.lorenzoshipping.com