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Lorenzo Shipping attains higher revenues, narrower net loss in 9 months

Lorenzo Shipping Corporation (LSC) posted total revenues of P2.164 billion for the nine months, ending in September, which was P216 million higher than last year’s same period while the net loss went down to P78 million from P113 million.

LSC saw container cargo volumes were up by 5.24% which resulted in an increase in revenues by P216 million to P2.164 billion as of September 30. LSC’s gross profit reached P24 million, a significant improvement from a negative gross profit last year. Direct costs increased to P2.140 million from last year’s P1.972 million mainly due to increases in the volume of container cargo, higher fuel price, and consumption.

It said the third quarter was the most challenging period, as economic activity, and freight volumes further decreased, coupled with the continued substantial increases in the cost of fuel. These factors heavily affected its profitability. LSC remains hopeful of bouncing back in the fourth quarter.

“Vessel and service integrity remains one of the company’s primary goals, as the peak season for cargoes is expected from October to December. Revenue and cost recovery, such as fuel surcharges and pass-on of tariff adjustments will be pursued to keep pace with the rising expenses,” it said.

Notwithstanding, the increase in revenues outweighed the increase indirect costs, resulting in positive gross profit margins. General and administrative expenses reached P106.9 million, net finance costs amounted to P36 million for the nine months, 25% or P12 million lower than the P48 million in the same period last year due to diminishing loan balances and lower interest rates.

LSC posted a net “other income” of P41.6 million, P4 million higher than last year, attributed mainly to the proceeds from service recoveries and insurance. Earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to P115 million in 2021 compared to P138 million in 2020.

“LSC’s operating results for the nine months recorded a net loss of P78 million compared to the P113 million net loss for the same period in 2020, a remarkable improvement of P35 million,” it said.

LSC will implement revenue-recovery and cost-mitigation programs and targets will be adjusted to ensure that the contribution margin and EBITDA remain healthy.

Rationalization of resources and operating costs are imperative to achieve efficiency and economies of scale. Strict management and monitoring of billing and collection processes will ensure cash flow and liquidity. The well-being of the workforce will always be a key initiative, as regular campaigns for Covid prevention, wellness seminars, employee surveys, and nationwide vaccination of employees was carried out, along with standard health and safety protocols in all vessels, offices, yards, and other facilities.

Lorenzo Shipping implements business continuity measures, meticulous risk mitigation, and environmental, social, and governance (ESG) compliance to achieve sustainability for the rest of the year and the succeeding years.
Source: Manila Times

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