Philippine carrier Lorenzo Shipping Corporation (LSC) reported a net loss of P231 million in 2015 from a net income of P44 million in 2014, hampered by fewer vessel trips.
Freight revenue last year likewise dropped, contracting 5% to P2.283 billion from the P2.404 billion earned in 2014. The decline was due to a reduction in the number of vessel trips owing to extended dry docking and unscheduled downtime of vessels, LSC disclosed to the Philippine Stock Exchange. Last year, the carrier dry docked four ships.
Gross profit declined 46% to P157 million from P293 million, while cost of services surged 1% or by P22 million compared to the prior year. LSC said carriage and arrastre rates as well as trucking costs increased last year.
“LSC had to resort to co-loading of cargoes in order to continue serving its customers while its vessels (were) on drydock. This resulted in higher co-loading expenses,” the carrier explained.
The domestic carrier said it is embarking on a major turnaround project to “address declining profitability and service reliability and increasing costs.”
Strategies include restoring the reliability of LSC’s service by having well-maintained vessels and shore equipment and highly motivated sea- and land-based staff.
It also plans to optimize vessel use on profitable routes, and implement cost-reduction programs by improving operational and financial processes, including cost monitoring and accounting.
Last year, LSC acquired a new vessel, MV Lorcon Iloilo, and a new container yard in Bacolod City, Negros Occidental.
The company owns seven cargo vessels with capacities ranging from 200 twenty-foot equivalent units (TEUs) to 426 TEUs, deployed in key ports in the country. It also carries rolling cargoes such as heavy equipment, trucks, and vehicles as well as non-containerized cargoes such as steel products and bridging materials. Livestock cargoes are also part of its transport services, carried in special vans.
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