Philippine transportation solutions provider 2Go Group, Inc. reported a net income of P981.942 million for the first nine months of 2016, which is 7.3% up from the P914.969 million earned in the same period last year.
Revenues grew 19% to P14.42 billion from P12.12 billion in the first three quarters of 2015, largely due to the 23% expansion of the non-shipping group, the company said in a disclosure to the Philippine Stock Exchange.
The non-shipping business, which consists largely of logistics and supply chain solutions, benefited from the expansion of its organic business and the development of new accounts. On the other hand, the shipping arm’s growth came from higher volume and better load factor for both northbound and southbound routes.
With the strong growth of the non-shipping business, 2Go said revenue mix of the group continues to tilt towards non-shipping, which now accounts for 56% of total turnover.
The strong performance of its core business, however, is dampened by a non-recurring loss arising from the disposal of a vessel as part of its re-fleeting program, replaced by a newer and more efficient ship which was launched in March 2016, 2Go said.
To further improve business and offer end-to-end capabilities, 2Go has established a supply chain solutions division. The new unit was organized to expand services to existing key customers and capture their end-to-end logistics spend, as well as to tap into new key accounts, targeting those belonging to the top 1000 corporations, and offer them the same end-to-end proposition. Growth will be driven by these future engagements, 2Go said.
Company growth, it further explained, is likewise spurred by the increase in personal consumption, especially given that majority of its customers are from the fast-moving consumer goods industry. The group is working to get these customers to outsource all their logistics requirements to 2Go.
“We can help address our customers’ capacity challenges by economically sourcing transportation and other supply chain needs. That way, our customers can concentrate on their core businesses and let 2Go handle all their end-to-end logistics requirements, leading to better efficiencies in their operations,” the group stated.
It noted that the changing lifestyle of people has engendered the retail industry to shift to smaller 24/7 convenience stores not only in major cities and key urban centers but also in smaller towns across the archipelago.
“Supply chain infrastructure remains a challenge for almost all retailers going into smaller formats. This necessitates complex logistics methods that can only be served by the bigger logistics companies such as 2Go,” it added.
Earlier, 2Go president and chief executive officer Sulficio Tagud, Jr. said the group will be spending P1.9 billion on capacity and fleet expansion as it anticipates the continued growth of its businesses.
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