THE high cost of fuel will keep growth flat this year at Philippine cargo carrier Lorenzo Shipping Corp (LSC).
“It is really hard to forecast better figures for this year,” LSC president Roberto Umali said at the sidelines of the company’s annual stockholders’ meeting last week in Manila.
“For cargo volume, there is little growth but this is still below target while in terms of revenues, it’s flat as the price of oil is dragging our revenues down.
“We believe that such trend — a slowdown in business and rising fuel cost — will continue until the end of 2011 as the conflict in the Middle East continues further putting pressure on the price of oil in the world market,” Umali explained.
“Almost all shipping line operators are sharing the same forecast this year of just flat growth.”
Fuel expenses represent a third of the total cost for most shipping lines. Last year, this expense jumped by P93 million at LSC.
The company’s performance last year was a far cry from its prospects this year. In 2010, LSC registered a net income of P52 million, up 116% over 2009 due to the relatively better economy attributed mainly to election spending.
Voyages also increased 17% resulting in a 9% rise in cargo volume. Vessel utilization was at 80% compared to this year’s 70%.
LSC is deferring its refleeting program to next year.
The company has acquired about 500 new containers to replace aging units and is reviewing its pool of cargo-handling equipment to see whether they need replacement. Next year there are plans to modernize the off-dock container yard and fully migrate to a front-end software.
