2GO Group, Inc. has incurred a net loss after tax of P714 million in the first nine months of 2018, a reversal from the P76 million net income during the same period in 2017.
The revenue decreased 7% to P15.466 billion in the period January to September 2018 from P16.657 billion in the same period last year, 2GO said in a disclosure to the Philippine Stock Exchange.
Shipping revenue dropped 10% to P6.473 billion during the nine-month period this year from P7.187 billion in the same period a year ago primarily due to dry-docking of nine vessels for refurbishment and repair and maintenance. This compares to seven vessels dry-docked in the same period last year.
As a result, total freight capacity declined 12%. Travel capacity decreased 8% for roll-on/roll-off passenger vessels, while fast craft capacity shrank 4%. Shipping revenues were also adversely affected by weather (e.g., typhoons, storms, rough seas), which led to cancelled voyages over the course of the nine-month period.
Overcapacity and competition in the freighter market likewise continue to push down freight rates, 2GO said.
Revenue from the non-shipping business (logistics and distribution) likewise dipped by 5% in January-September 2018 compared to last year. Revenue from logistics and other services slipped 11% to P4.614 billion from P5.206 billion as a result of rationalizing unprofitable accounts.
A bright spot is the distribution business, whose revenue rose 3%.
The non-shipping business accounted for 58% of total revenue during 2018 versus 57% during 2017.
2GO said total costs and expenses were maintained despite rising fuel prices during the period and increased sales of inventory from its distribution business. Fuel prices increased by 28% in 2018; 2GO was impacted by a negative price variance of P512 million. All other costs and expenses were generally kept at bay due to improvements in efficiencies and a focus on controlling costs, the company noted.
For the rest of 2018, the company said it aims to continue its corporate governance initiatives, and expand and further enhance its service offerings to its customers and stakeholders. These will be achieved through more streamlined operations and collaboration within its business units, investment in warehousing and logistics information technology solutions for customers, and synergies and best practices from its new shareholders.
“Management is confident that 2GO will further its growth and become an even stronger logistics solutions provider going forward,” the company said.
2GO provides shipping, logistics and distribution services to small and medium enterprises, large corporations, and government agencies throughout the Philippines. The shipping group operates ocean-going freighters, roll-on/roll-off freight and passenger vessels, and fast ferry passenger vessels.
The logistics group offers transportation, warehousing and distribution, cold chain solutions, domestic and international ocean and air forwarding services, customs brokerage, project logistics, and express and last-mile package and e-commerce delivery. The distribution group leverages 2GO’s shipping and logistics services to provide value-added distribution services to its principals and customers.
