2GO Group, Inc. posted a net income of P40.910 million in the first quarter of 2018, a reversal from the P264.863 million loss in the same period last year.
Revenues for the period covered increased 11% to P5.37 billion from P4.85 billion in the first quarter of last year. 2GO in a regulatory disclosure said the increase was driven by the group’s non-shipping business—logistics and distribution—which accounted for 64% of the total revenues for the first quarter of 2018, up from a 52% share in the same period last year.
The non-shipping business recorded a 37% increase in revenues for the period, supported by increased service offerings to existing strategic customers, the addition of new customers, and an overall focus on customer service.
But revenues from the shipping business—which includes freight and travel—decreased 18%, primarily due to the scheduled dry-docking of seven vessels for refurbishment and repairs and maintenance during the first quarter of 2018.
Shipping revenues were also affected by weather disturbances, leading to cancelled voyages over a two-week period during the first quarter.
“The overcapacity and competition in the freighter market continues to push down freight rates,” the company noted.
Revenue from travel, on the other hand, was maintained despite the 5% reduction in capacity arising from the scheduled dry-docking.
Total cost and expenses for the first three months of the year rose 15% versus the same period last year owing to rising fuel prices and increased sales of inventory from the company’s distribution business.
2GO said that for 2018, corporate governance initiatives will continue, and service offerings to customers and stakeholders will be expanded and enhanced.
“The Group plans to achieve this 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,” the company said.
“Management is confident that 2GO will further its growth and become an even stronger logistics solutions provider going forward,” it added.
2GO said that last April, its stockholders approved the merger of 2GO and its parent company, Negros Navigation Corp., Inc., with the former as the surviving entity, subject to the final decision and approval of the terms of the merger by the Board of Directors.
2GO said the merger aims “to simplify the corporate structure and to develop efficiencies and economies within the group.” It is also in line with 2GO’s efforts to streamline operations, reduce costs, and increase shareholder value.
