Synergies, cost savings boost 2Go profit by 62%

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ID-100215060Listed 2Go Group, Inc. posted a net income of P633.76 million in the first nine months of 2014, soaring 62% from P390.89 million in the same period last year, attributed mainly to stringent management of business operations and expenses.

In a disclosure to the Philippine Stock Exchange, 2Go said the positive performance from January to September came from the synergy among the different units within the group and ensued “despite the blistering effect of the port congestion as a result of the Manila daytime truck ban.”

Consolidated revenue amounted to P10.65 billion, 1.17% higher than the P10.53 billion last year.

Of the total, the freight business contributed 36.16% with P3.852 million, up 2.09% from last year’s P3.773 million.

Accounting for 22.43% of the total is the passage business, which reported revenue of P2.389 million, 4.8% lower than the P2.51 million last year.

2Go said a 20% reduction in carrying capacity of its inter-island vessels took its toll, offset by higher load factors for both freight and passage business. Freight increased its load factor from 70% to 85% while passage increased its load factor from 53% to 58%. Domestic tourism noticeably improved and boosted the volume of sea travelers.

Total costs and expenses, on the other hand, decreased 2% to P9.736 million in the first nine months from P9.903 million in the same period last year, due to “improvements in efficiencies as well as a significant reduction in overhead through stringent cost management,” 2Go said.

The group said its logistics arm has been steadily growing, further increasing its percentage in total revenues to 41% from 40% in 2013.

The logistics group introduced during the period new service initiatives such as forward stock locations services to complement the cross docking services currently being offered to its major clients, to be serviced by its 13 warehouse locations all over the country.

2GO Express’ partnership with FedEx, meanwhile, continues to expand, “showing a substantial growth in revenues most especially on the retail side.”

Furthermore, Scanasia and 2GO Logistics are still fortifying their customer base by adding more top 1000 corporations to its list of clients and increasing the volume of its current clients.

The domestic carrier said it has transformed its business model into a complete supply chain solutions provider by “capitalizing on the strengths of its various business units.”

Earlier, Jose Manuel Mapa, 2Go vice president for group relations management and central sales, told PortCalls the group acquired two new vessels, boosting its fleet to 20, of which eight are cargo ships.

The carrier also doubled its port calls to Batangas port this year, and leased a container yard to accommodate the volume it handles in that area.

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