Philippine carrier Lorenzo Shipping Corp. (LSC) recorded a net loss of P146.1 million in 2018, lower by 15% from the P171.8 million loss in 2017.
In a regulatory disclosure, LSC said freight revenues declined 10% in 2018 to P1.97 billion from P2.18 billion in 2017, due to “competitive pressure on freight base as a result of increased industry vessel capacity.”
To compensate for the decrease in average freight revenue, LSC said it focused on regaining old accounts and developing new ones especially for northbound cargoes. The carrier also had fewer vessel trips in 2018 compared to the previous year owing to extended dry-docking and unscheduled downtime of vessels.
Further, LSC said it continued to focus on improving vessel reliability and operational efficiencies which resulted in direct costs amounting to P1.924 billion, 10.4% less than the P2.148 billion 2017 costs.
Efforts were also made to maximize vessel utilization and load factor, translating to gross profit improving 37% to P47.4 million from P34.6 million.
General and administrative expenses improved, dropping 5.4% to P174.316 million from P184.205 million in 2017.
LSC that its turnaround plans have been reaping benefits, as seen in improvement in direct costs. It added that efforts to recover revenue through bunker recovery, excise tax recovery, and arrastre recovery charges are ongoing.
LSC has been reporting net losses since 2015, but has started to post lower losses since 2017.
Turnaround plans carried out in 2018 included enhancing partnership with selected carriers for flexibility, especially in cases of excess volumes or service disruptions; and maximizing vessel capacity, especially for northbound volumes, using improved pricing schemes.
LSC also continued to reduce operating costs for trucking, terminal, and cargo handling through a focused and flexible organizational structure and appropriate technology.
Programs to manage profit leakage are now being implemented, focusing largely on claims reduction and improved billing and collection cycle through people, process, and technology intervention.
LSC owns and operates a fleet of five vessels deployed to key ports in Manila, Visayas and Mindanao. It also owns various equipment and facilities for the efficient handling of customers’ cargoes. These include land-based equipment such as forklifts, top lifts, trucks, container yards, and warehouses at its branches and agencies.
