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Net loss of P85.70 million in the first nine months of 2022 due mainly to higher fuel costs exceeds the P78.48 million net loss in the same period in 2021
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Container volumes handled from January to September 2022 fell 4.5% year on year due to fewer voyages related to port congestion
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Soaring ship fuel costs and other related expenses, such as trucking, tuggage, and pilotage, inflated the direct costs and offset the increase in revenue
Higher fuel costs lifted Lorenzo Shipping Corp’s (LSC) net loss to P85.70 million in the first nine months of the year, larger than the P78.48 million net loss posted year-on-year.
Revenues from January to September totaled P2.43 billion, 12.4% higher than the P2.16 billion reported during the same period in 2021, LSC said in a regulatory disclosure.
For the same period in review, container volumes handled by LSC slipped 4.5% year-on-year due to fewer voyages attributable to port congestion.
LSC said the overall increase in revenues came from efforts to recover increasing costs through fuel cost recoveries and freight adjustments.
The company ended the third quarter of 2022 with gross profit of P26.06 million, up P1.98 million compared with the same period in 2021.
LSC said this stemmed mainly from the increase in revenue due to an implemented general rate increase at the beginning of the second quarter for specific customers. But due to soaring ship fuel costs and other related expenses such as trucking, tuggage, and pilotage, the direct cost rise offset the revenue increase.
Direct costs hit P2.41 billion in the first nine months of the year, 12.3% up from P2.14 billion in the same period last year.
LSC said domestic consumption intensified due to continuous relaxing of COVID-related pandemic restrictions, which fueled demand for transportation and shipping services escalated as industry capacity remained constant.
Combined with inefficiencies due to congestion at ports and facilities, creeping fuel price hikes, cost inflation and peso depreciation, LSC said it resorted to freight recovery coupled with the need to further rationalize expenses.
Its operation plans for the second semester include the optimization of routes and deployment to lanes that generate the highest contribution margin and the use of technology and digital tools to enhance customer experience. It is also prioritizing regular maintenance and repair of vessels, containers, and land-based equipment for uninterrupted services.
Lorenzo has a fleet of five vessels and four ships deployed under a transport service contract to the key ports of Manila, the Visayas and Mindanao.
