PHILIPPINE companies Negros Navigation Co (Nenaco) and ATS Consolidated, Inc (ATSCI) are reducing their consolidated revenue and volume targets for 2011 due to rising fuel costs, slow economic activity, and effects of consolidation.
Consolidated fuel expenses now represent 60% of the total cost from the usual 40%.
“This year, we will be behind our target both in revenues and volume despite operating at our optimum capacity,” ATSCI president Sulficio Tagud, Jr said at the sidelines of last week’s christening of MCC Transport Philippines’ new vessel, the MCC Luzon.
Revenue target this year is down to P14 billion from P16 billion but still higher than what was posted in 2010, Tagud said.
He added volume has also been affected by overcapacity in the local trade. The two companies expect to finish the year at about the same volume as last year’s.
Nenaco and its foreign investors bought 98.2% of Aboitiz Transport System (now ATSCI) from the Aboitiz family last December.
Both firms have junked plans to refleet at least in the next two years with tepid growth expected in the domestic market. The focus has been shifted to cargo, supply chain and value-added services. The passage business has been under pressure from budget airlines.
Together, Nenaco and ATSCI control 46% of the Philippine freight market and 60% of the passage market.
Photo by candescent
