Lorenzo Shipping sets strategic plan for profitability

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LORENZO Shipping Corp. (LSC) is maximizing freight margins and implementing cost rationalization amid economic challenges.

This strategic shift is in response to a combination of factors, including general inflation, currency depreciation, and various operational expenses such as bunkering, trucking, tuggage, empty repositioning, and maintenance of vessels and equipment.

Lorenzo Shipping is focusing on maximizing yield per container per voyage to offset the escalation of various expenses and other inflationary effects. PHOTO FROM LSC WEBSITE

“With the unpredictability of domestic consumption, emphasis will be given to the flexibility of operating strategies without sacrificing discipline and excellence,” LSC said.

It added that vigilance on vessel and equipment maintenance and service reliability, as well as a better customer experience on cargo deliveries, remain the company’s top priorities.

LSC is focusing on maximizing yield per container per voyage to offset the escalation of various expenses and other inflationary effects. It will continue with process improvements and innovation to significantly contribute to more efficient operations. LSC will closely monitor billing, collection, payables and other obligations to ensure continuous support of vendor services.

Additionally, the company will pay close attention to land- and sea-based employees’ physical, mental and emotional welfare to maintain high morale and maximize productivity. Undertake risk-mitigation measures and continuously strengthen statutory compliance to diminish service disruption and guarantee business continuity.

LSC’s total revenues for the six months ending June 30, 2023, amounted to P1.76 million. This was P187.61 million higher than the revenues reported over the same period in 2022.



Cargo volumes, however, were lower by 13.73 percent compared to last year. The decrease was due to fewer voyages attributable to a slowdown in domestic consumption during the second quarter of 2023.

The overall revenue increase was due to determined efforts in the fourth quarter of 2022 and the first quarter of 2023 to recover inflationary costs through freight adjustments.

The company ended the first semester with a gross profit of P293.93 million, a significant increase of P314.21 million compared with the same period in 2022. The gross profit stems mainly from vastly improved margins from optimized vessel routes and cargo mix combined with ongoing initiatives at cost efficiency.

General and administrative expenses for the six-month period totaled P102.30 million. This was P25.52 million higher than last year’s P75.77 million due to increased salaries and wages from an increase in necessary human resources and the expected business rebound from the pandemic.

Net finance costs amounted to P27.44 million for the six months, P7.16 million higher than P20.28 million over the same period in 2022 due to increased interest rates. In 2023, the company posted a net “other income” of P9.78 million, attributed to insurance claims proceeds and other miscellaneous income.

LSC’s operating results for the six months ending June 30, 2023, were a net income of P130.48 million, compared with a P105.20 million net loss over the same period in 2022.

“The increase in net income was due mainly to maximizing margins and mitigating unnecessary expenses,” it said.

As of June 30, 2023, total assets amounted to P3.09 billion, marking a 5 percent, or P156.65 million, increase from Dec. 31, 2022. Current assets increased from P1.03 billion to P1.20 billion by June 30, 2023, due to increased cash, receivables, prepayments and other current assets.





The net income over the first semester of 2023 decreased the retained deficit of LSC to P555.12 million from the retained deficit of P685.61 million at the end of 2022.

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