LORENZO Shipping Corp. (LSC) said fuel prices continuously increased along with high inflation, resulting in a gross loss of P20.28 million in the first half of the year.
LSC continues to pursue freight recovery and cost rationalization efforts. The gross loss stems largely from the increase in direct cost due to soaring vessel fuel costs and other related expenses, such as trucking, tugging and pilotage.
As domestic consumption increases with relaxed pandemic restrictions, demand growth is underway in capacity availability, resource readiness and work process improvements along with a hybrid work schedule.
In the second half of the year, LSC will have schedule integrity and vessel and equipment maintenance for service reliability to improve customer experience, which is one of its top priorities.
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It will focus on maximizing yield per container per voyage to counter the escalation of various expenses and will continue with process improvements and technology applications to significantly contribute to more efficient operations.
LSC management will closely monitor billing and collection to ensure liquidity; pay close attention to the physical, mental and emotional welfare of both land-based and sea-based employees to maximize productivity; and undertake risk-mitigation measures and continuously strengthen statutory compliances to diminish service disruption and ensure business continuity.
Twenty-foot equivalent unit (TEU) volumes were lower by 7.1 percent due to fewer voyages attributable to prevalent port congestion. The overall increase in revenues was attributed mainly to efforts to recover from increasing costs through fuel cost recoveries and freight adjustments.
General and administrative expenses reached P76.77 million, which was P15.99 million higher than last year's P60.78 million due to increased salaries and wages coming from an increase in necessary manpower.
Net finance costs amounted to P20.28 million for the six months, 20.0 percent or P5.15 million lower than the P25.42 million over the same period in 2021 due to reductions in loans.
In 2022, the company posted a net "other income" of P12.26 million, up by P5.66 million year-on-year, attributable to insurance claims proceeds and other miscellaneous income.
Considering all of the above, LSC posted a net loss of P105.08 million, compared with a P5.90 million net loss over the same period in 2021, due mainly to high fuel costs.