MAGSAYSAY-owned Lorenzo Shipping Corp.’s (LSC) recent application for Board of Investments registration has been approved.
As a result, LSC will enjoy an income tax holiday for six years; additional deduction from taxable income of 50% of wages corresponding to the increment in the number of direct labor in the year of availment against the previous year; and tax credit equivalent to the national internal revenue taxes and duties paid on raw materials and supplied as well as semi-manufactured products used in producing its export products for 10 years.
The company is also getting access to at least 70% of Customs bonded warehouses for its production outputs and exemption from payment of wharfage dues, any export tax or duty and fee for 10 years.
In addition, the BOI registration exempts LSC from taxes and duties on imported spare parts and consumable supplies as well as imported capital equipment, spare parts and accessories up to June 2011.
LSC’s modernization program has been put on hold due to the unpredictable international market for second-hand and brand-new vessels. However, last month LSC signed a memorandum of agreement with Maltese company Black Tetra Shipping Ltd for the purchase of a multi-purpose vessel for $8.3 million that will be deployed towards the end of the year. The vessel will eventually replace one of its older vessels.
LSC presently operates seven cargo vessels.
The company will also continue to purchase new containers to replace old ones, and fabricate more hog vans or specialized containers for livestock delivery, to further complement 60 redesigned hog vans introduced last year as part of its modernization program.
Last year, LSC posted revenues of P1.337 billion, slightly higher than the P1.334 billion registered in 2005 despite lower vessel voyages and cargo volume.
Net income for 2006, however, nosedived to P39.7 million from P103.8 million in 2005.
