2GO Group, Inc. is hoping to turn a profit by end-2019, despite recording a its second consecutive year of net loss in 2018.
“We’re working hard to reverse (the financials). We have to re-strategize… evaluate some of our business segments,” 2GO Chairman Dennis A. Uy told reporters after the company’s annual stockholders’ meeting last Thursday.
In a regulatory filing, the listed company reported its attributable net loss widened to P1.346 billion last year from only P316 million in 2017. Gross profit declined 53% to P1.204 billion due to decreased capacity of freight and ROPAX (roll-on, roll-off passenger) vessels.
2GO said revenues were up 2% to P21.99 billion due to its shift in accounting standards that resulted to “certain revenue streams amounting to P1.4 billion,” but noted that without this, shipping revenue in 2018 was down 6%.
2GO said the lower revenues from its shipping business is due to the drydocking of 12 vessels in 2018, which is more than the 10 vessels that were drydocked in 2017. Drydocking is the process of taking out ships in a service yard for repair and maintenance.
“Out of the twelve vessels drydocked in 2018, eight were big and medium-sized vessels compared to only five for 2017. With this, the total Freight capacity decreased by 13%. Travel capacity decreased by 8% for the ROPAX vessels, while fast craft capacity decreased by 4%,” it said.
The company added that the weather affected its operations last year through voyage cancellations, as well as tight market competition that resulted to lower freight rates.
Revenues were also down from 2GO’s other segments, as its non-shipping business slipped 3% where its logistics and other services decreased 12%, due to “rationalization of unprofitable accounts.”
But 2GO noted revenues from its distribution business increased 9% as it “improved its service offerings to existing strategic customers (e.g., end-to-end warehousing, inventory management, cross-docking, delivery, merchandising), with an overall focus on customer service.”
2GO recorded flat expenses during the period at P2.160 billion from the previous year’s P2.175 billion “due to improvements in efficiencies and focus on controlling costs.” This comes even as it said fuel prices were up 27% last year and the company took a negative price variance of P675 million. — Denise A. Valdez