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Domestic carrier Lorenzo Shipping Corp.’s (LSC) net loss of P68.25 million in 2020 is a decline of 61% from the P174.46 million net loss in 2019
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Freight revenues were 10% lower and operating expense fell by 12% due to the decline in economic activity brought about by quarantine restrictions
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LSC said its “recovery is already in full swing” following improvement of gross profit and significant reduction in net loss despite the COVID-19 pandemic
Domestic carrier Lorenzo Shipping Corp. (LSC) recorded a net loss of P68.25 million in 2020, a decline of 61% from its P174.46 million net loss in 2019.
Freight revenues last year amounted to P2.66 billion, 10% lower than the P2.94 billion revenues in 2019, LSC said in a regulatory disclosure.
Total operating expense in 2020 shrank by 12% to P2.56 billion from P2.91 billion in 2019.
LSC attributed the decrease in freight revenue and direct cost to the decline in economic activity brought about by quarantine restrictions that started in the middle of March 2020 due to the ongoing COVID-19 pandemic.
The carrier has assessed that “the series of community lockdowns has a minimal impact” on its operations because the company belongs to those industries that are exempted from strict restrictions and are allowed to operate. It said the impact was more on the slowdown of container cargoes in port areas affected by strict community lockdowns.
Gross profit, meanwhile, was recorded at P98.26 million, a 218% increase from P30.93 million in 2019.
LSC said its “recovery is already in full swing” as noted from the improvement of its gross profit and the significant reduction in net loss despite the COVID-19 pandemic.
The carrier said it took “actions at profit rebuilding” in the form of bunker adjustment, excise tax recoveries, pass on of other increases in various port-related charges, and massive cost rationalization.
For this year, it will implement the same plans as needed. These include unhampered vessel and service reliability as top priorities in light of quarantine restrictions and attention on building up load factor per voyage given the decrease in overall market volume due to the pandemic.
The well-being of its workforce is also given importance through maximizing productivity and modifying work processes in view of the limitations arising from necessary health and safety protocols.
Cost-reduction programs are also continuously implemented using all available digital tools to ensure efficiency. Billing and collection is closely monitored and managed in expectation of low liquidity in an economic downturn during quarantine.
Lastly, depending on market conditions during the ongoing pandemic, any excess capacity and non-profitable routes are scrutinized and rationalized as necessary.
LSC operates a fleet of nine vessels deployed to the key ports in Manila, the Visayas and Mindanao. The carrier’s vessels have a capacity ranging from 300 twenty-foot equivalent units to 797 TEUs with speeds of 11 knots to 15 knots.
It also owns various types of equipment as well as facilities for handling cargoes, including land-based forklifts, top lifts, trucks, container yards, and warehouses at its branches and agencies.
