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LSC freight revenues down by 10%

Thursday, 02 May 2019 | 00:00

Lorenzo Shipping Corp. (LSC) said stiff competition and excess capacity in the domestic shipping resulted to a 10 -percent decline in freight revenues to P1.97 billion last year.

Lorenzo Shipping recorded a total freight revenue of P1.97 billion in 2018, lower by 10 percent or P211 million than the P2.18 billion revenues in 2017.

“The decline in freight revenue was due to competitive pressure on freight base as a result of increased industry vessel capacity,” Ellen Estinar, corporate accounting manager said in a disclosure to the Philippine Stock Exchange (PSE).

LSC considered other containerized cargo shipping companies as competitors, such as 2GO Group, Inc. (2GO), Philippine Span Asia Carrier Corp. (PSACC), Solid Shipping
Lines, Inc. and Oceanic Container Lines, Inc. among others. 2GO caters to both passenger and cargo market while the rest were cargo carriers.

“Competition among domestic lines is intense, given the overcapacity of vessels aggravated by new entrants in the industry,” LSC said.

To compensate for the decrease in average freight revenue, LSC has focused on regaining old accounts and developing new ones especially for northbound cargoes. The shipping line also had fewer vessel trips compared to the previous year owing to extended dry-docking and unscheduled downtime of vessels.

Despite these challenges, LSC continued to focus on improving vessel reliability and operational efficiencies which resulted to an improvement of P223 million in direct cost. Efforts were also made to maximize vessel utilization and load factor.

The company ended the year 2018, with a gross profit of P47.4 million, higher than the P34.6 million gross profit posted in 2017. Expenses likewise improved by P9.9 million compared to the previous year.
Source: Manila Times

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