Philippine carrier Lorenzo Shipping Corp (LSC) posted a narrowed net loss of P51.7 million in the first quarter of 2019 from the P71 million net loss it recorded in the same period in 2018, as volumes handled grew more than 50% in the first three months of this year.
Revenues for the first quarter of this year rose 65% to P735 million from P445.603 million reported in the same period in 2018 due to the chartering of four vessels from sister carrier NMC Container Lines, Inc. With this, LSC during the period operated nine vessels, resulting in higher volumes by 52% compared to the volume in the same period last year.
Reporting net losses since 2015, LSC has started to post lower losses since 2017.
Direct cost, however, went up 58% to P733.8 million from last year’s P463.1 million due to the additional cost from the chartered vessels.
General and administrative expenses were also 5% higher in the first quarter at P45.3 million from P42.9 million last year due to increase in retirement contributions, rentals and provisions. Net finance costs amounted to P22.3 million for the three months, which is 34% higher than the P16.8 million in the same period of 2018 due to increase in interest rate.
LSC said its turnaround plans have been reaping benefits as shown in the significant improvement in its direct costs. There are ongoing efforts at revenue recovery in the form of bunker recovery charge, excise tax recovery charge, and arrastre recovery charges.
The same plans, which the company has been implementing for years now, will be carried through till end of 2019. These include enhancing partnership with select 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 will also continue to reduce operating costs for trucking, terminal operations, and cargo handling through a flexible organizational structure and appropriate technology.
Programs to manage profit leakage are 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 types of equipment as well as 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.
