DOMESTIC shipping operator Negros Navigation Co (Nenaco) reported a 14% drop in net income to P175.2 million in the first half of the year compared to the same period last year on account of higher fuel prices.
Nenaco chairman and chief executive Sulficio Tagud, Jr said fuel prices jumped 42%, pushing operating expenses to increase 37%. Fuel represents the biggest component of the company’s operating costs.
Revenues for the period in review were, however, higher by 25% to P1.37 billion from P1.1 billion, thanks to higher passage (up 30%) and freight volumes (up 40%).
“Our performance was dampened by the limited capacity that we had during the period as three of our freighters and one passenger/cargo ferry underwent maintenance and drydocking at different intervals during the first quarter,” Tagud explained.
“Despite that handicap, we kept our focus on our core businesses and at the same time held down our costs, other than fuel, to very close to last year’s levels,” he added.
Early this year, Nenaco repackaged its freight business with the launch of the NN Freight, a house-to-house cargo service.
Nenaco is currently embarking on an expansion program, including the acquisition of at least two combo vessels this year worth about $20 million. Each of the vessels can carry about 2,000 passengers and 150 containers.
Nenaco is owned by KGLI-NM, a joint venture company between Negros Holdings Management Corp and KGL Investments of Kuwait.
