Manila-based 2GO Group, Inc remains optimistic about its cargo business prospects for the year despite posting lower first-quarter revenues from its supply chain unit.
In a report to the Philippine Stock Exchange, the company said revenues from its supply chain business suffered a 9% or P103.4 million decline vis-à-vis the first quarter in 2011.
The decline was attributed to less sale of goods following the disengagement of principals with negative margins. The company said the latter development was partially mitigated by higher domestic sales growth.
2GO’s local freight business fared better, posting a 14% or P190.2 million increase in revenues in the first quarter due to combined increases in volumes and average price.
Revenues from the passage business also grew 15% or P79.7 million owing to higher average rate per passenger.
As a result, 2GO narrowed its net loss for the first quarter to P213.223 million from P228.383 million in the same period last year.
Consolidated revenues reached P3.3 billion, up 7% or P220.1 million from last year.
The company’s shipping arm contributed P2.3 billion to total revenues, and the supply chain sector, P1 billion.
Operating expenses, consisting largely of vessel-related costs, jumped 27% or P525.9 million on account of higher fuel costs and chartering expenses. Fuel costs amounted to P1.1 billion against P748.9 million in the first quarter of 2011.
All other costs and expenses, on the other hand, dropped 27% or P365.5 million.
For the period in review, 2GO initiated financial restructuring and consolidated most container yard services, especially for ports and branches actively being serviced by Negros Navigation (Nenaco) and 2GO when they were still separate entities.
Nenaco bought Aboitiz Transport Systems Corp, the owner of the 2GO brand, in 2010.
2GO also rationalized vessel operations by disposing of four of its less-efficient vessels as well as imposed a single-ticketing system for Nenaco and 2GO passengers.
Back-office services have been consolidated and centralized to ensure servicing of suppliers is standardized.
Photo from http://www.2go.com.ph/img/design/home-stage-supply-chain.jpg
