Chelsea Logistics was not profitable last year, says Dennis Uy

DESPITE a 35% increase in its revenues for 2019, Chelsea Logistics and Infrastructure Holdings Corp. said it failed to achieve profitability in that year, citing the full costing of ships it deployed, expenses it incurred for new vessels and the construction of its new warehouse complex.

“Chelsea was not able to achieve profitability this year due to the full costing of ships (including, but not limited to, depreciation, financing costs, crew costs, insurance and other related costs, both fixed and variable) deployed during the year but whose full revenue potential has yet to be realized as these revenues ramp up,” the Dennis A. Uy-led company said in a disclosure to the stock exchange on Monday.

It added that there were also additional interest expenses incurred for the new vessels and the 2.5-hectare parcel of land that the company had acquired.

The company also cited the construction of a warehouse complex, which will be completed by the third quarter of this year.

Chelsea did not disclose its 2019 net income attributable to parent, but it said it registered P7 billion in revenues, which was 35% higher than the previous year.

To recall, the company had posted a net loss of P550.53 million for 2018, a reversal of the P161.2- million profit in 2017.

Chelsea attributed its growth in 2019 to the shipping and logistics segments of its business.

“In shipping, the passage and freight segments reported strong year-on-year growth figures of 47% and 43%, respectively… In logistics, there was a 60% jump to P459 million compared to P287 million in 2018,” it said.

It said its operating activities generated P9.8 billion last year, which were then invested in new vessels, land and warehouse, delivery trucks and other equipment.

Portions of the cash flows, Chelsea said, were also “used to pay P4.5 billion in maturing debts, both principal and interest, during the year.”

Chelsea said further that its assets grew 27% last year to P41 billion from P32.3 billion.

“Bulk of the increase in assets came from increases in fixed assets due to vessel acquisitions and warehouse construction costs,” it added. — Arjay L. Balinbin