Chelsea defers capex, studies job cuts
By Arjay L. Balinbin, Reporter
CHELSEA Logistics and Infrastructure Holdings Corp. on Tuesday said it was looking to cut jobs “in phases” in the next six months as a way to cushion the impact of the coronavirus pandemic on its business.
In a phone message to BusinessWorld, Chelsea Logistics President and Chief Executive Officer Chryss Alfonsus V. Damuy said one of the strategies that “the company looks to do in the next six months” is “right-sizing” its workforce. “We will implement it in phases,” he added.
As for the company’s capital expenditures (capex) for 2020, he said: “We are deferring except for those [that are] committed.”
To recall, the group had signed two shipbuilding agreements for the delivery of 98-meter and 123-meter bed/seat roll-on/roll-off passenger ferry ships from Japan. The total contract price for such vessels amounts to approximately P2.35 billion.
The total amount paid as of Dec. 31 last year amounted to P367.3 million, the company said in a disclosure to the stock exchange.
In a news release on Tuesday, the listed company noted that the pandemic has disrupted the momentum it gained in the first two months of 2020 where it showed “significant growth.”
“As a response, the company immediately revisited its future strategies, including strengthening its balance sheet and aggressive fixed asset management by slashing planned capital expenditures and disposing of aging and underperforming vessels,” it said. “To scale up work efficiencies, the group is now undergoing workforce rationalization to restructure support functions and right-size existing workforce,” the company added.
Chelsea Logistics also said it intensified its logistics services during the lockdown period which started in March.
The group said further that it remains keen on its planned airport and port modernization projects in Davao.
“From strengthening its core businesses in the first three years of operation, Chelsea Logistics is now poised to take advantage of the opportunities in sectors with positive and resilient economic outlook, including e-commerce which is seen to grow four times in the next five years and infrastructure projects related to the Government’s Build, Build, Build Program,” it said.
The Dennis A. Uy-led firm’s net loss ballooned by 51% to P832 million last year as the company suffered from its share in the losses of some units and expenses for new vessels and a warehouse complex.
