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Chelsea cost-cutting continues after ‘disappointing’ results — CEO

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CHELSEA Logistics and Infrastructure Holdings Corp. said on Monday it would continue with cost-cutting measures to improve its financial health, as it expects to recover from the effects of the global health crisis in the second half of 2021.

“Despite the disappointing results in the third quarter, we continue to prepare the group for a prospective recovery we see by the second half of 2021,” Chelsea Logistics President and Chief Executive Officer Chryss Alfonsus V. Damuy said in a statement.

The company continues to work on “stemming the losses and improving its financial health,” it said.

The measures it implements include “workforce rationalization, improved vessel utilization, enhanced revenue management, cost-cutting strategies, and suspension of uncommitted capital expenditure programs.”

Mr. Damuy noted that such measures are already starting to make a positive impact on the company’s operations. The company has yet to disclose its full quarterly report.

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In its statement, the company said its nine-month revenues decreased by 35% to P3.31 billion.

Chelsea Logistics attributed the decline to the  “continued community quarantine measures imposed all over the country which adversely impacted its operation.”

“Passenger travels are at their lowest and cargo movement has also materially declined, which resulted in a P2.601-billion net loss in [the nine-month period], a significant reversal from the P20-million net profit registered in the same period last year,” it added.

The company saw its shipping business revenues decline by 37% year-on-year to P3.08 billion, “mainly due to a 93% decline in passage revenues… to just P25 million” in the third quarter.

“On a cumulative nine-month basis, Chelsea’s freight revenues were also down by 24%, as the community quarantine measures brought on less demand resulting in lower voyage frequency,” it said.

The company also reported a P1.29-billion operating loss as of September, as compared with the P961-million operating profit it posted last year.

“This was due to a sequentially bigger operating loss in the third quarter of P1.01 billion versus P318 million in the previous quarter,” the company noted.

Chelsea Logistics said further its cost-cutting measures have resulted in the decline in its operating and finance expenses “for the second consecutive quarter.”

“Operating expenses have gone down to P237 million in the third quarter from P317 million and P295 million reported in the first and second quarters of this year, respectively,” it explained.

Finance charges have also gone down from P350 million in the first quarter to P321 million last quarter and further down to P320 million in the third quarter, it added.

Shares in Chelsea Logistics on Monday closed 6.15% lower at P5.49 apiece. — Arjay L. Balinbin

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