Chelsea Logistics slumps to loss due to 2GO, bigger expenses - EcoFinBiz Blog

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Chelsea Logistics slumps to loss due to 2GO, bigger expenses


By Denise A. Valdez, Reporter

CHELSEA Logistics Holdings Corp. (CLC) swung to a net loss last year, dragged by its share in losses in 2GO Group, Inc., bigger expenses, and higher interest rates.

In a regulatory filing, the Dennis A. Uy-led company posted a net loss of P550.53 million for 2018, a reversal of the P161.2- million profit in 2017.

“A significant portion of the net loss reported by the Group can be attributed to its share in net losses of 2GO Group, Inc. amounting to P453 million,” CLC said.

“Excluding this amount, CLC would have reported a net loss of just P98 million, which is primarily due to higher bunkering costs and increased interest rates…,” it added.

CLC saw a 32% increase in its consolidated revenues to P5.17 billion from P3.91 billion in 2017 as all its business segments improved profitability.

But the company’s expenses outpaced its revenue growth, as its cost of sales and services grew 31.2% to P3.75 billion and other operating expenses rose 70% to P900.51 million.

“The increase in Costs of Sales and Services significantly came from larger bunkering costs, crew salaries and employee benefits and supplies,” it said.

“Other Operating Expenses grew…due to increases in salaries and employee benefits, outside services and rentals as a result of the Group’s continued expansion,” it added. CLC said the deployment of additional vessels and higher fuel price last year contributed to the increase in its bunkering costs by 43% to P1.243 billion.

It also spent 145% more for charter hire costs at P240 million. This covered Phoenix Petroleum Philippines, Inc.’s deliveries by Chelsea Shipping Corp. to National Power Corp.’s Malaya power plant.

“The Group had to hire third party vessels as all of its barges are currently covered by a Contract of Affreightment in servicing the bunkering requirements of 2GO,” it said.

Shares in CLC slipped 1.15% or 6 centavos to close at P5.14 each on Tuesday.

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