Chelsea Logistics Holdings Corp. (CLC) pushed its earnings four times higher by the end of the third quarter, as its strategic investments continue to deliver while its operations expand further.
The Company booked a net income of P405.7 million for the nine months ended September 30, 2017. The amount settled 298% above the P102.0 million pro-forma combined earnings of subsidiaries in the same period of 2016.
“Our investments into better shipping and logistics continued to yield results and create more value for our investors, business partners and other stakeholders,” CLC President and CEO Chryss Alfonsus V. Damuy said.
The increase in the Company’s net income reflects the P168.1 million recognized by the Company as equity shares in the net income of Negros Navigation Co., Inc. and 2GO Group, Inc. through its investments in Udenna Investments B.V.
CLC generated total revenues of about P2.3 billion, 9% higher from the P2.11 billion combined revenues of its subsidiaries a year earlier.
Freight revenues amounted to P646.4 million, a 43% year-on-year increase largely from the commercial operations of MV Trans-Asia 12. The vessel only started plying the Manila – Cebu route in August 2016.
Passage revenues also increased by 10% to P339.5 million, following an increase in the number of passengers.
Tugboats fees, meanwhile, rose by 15% to P192.7 million on the back of a 51% increase in port calls at Calaca Seaport (formerly Phoenix Petroterminals & Industrial Park) as well as the operations of Fortis Tugs Corporation in Keppel Batangas in the entire period.
Higher revenues from the Company’s freight, passage and tugboat operations offset the 4% decline in charter fees to about P1.09 billion.
The decrease in charter fees primarily resulted from the change in the nature of agreements governing the chartering of M/T Great Diamond (formerly ChelseaThelma) and M/T Great Princess (formerly Chelsea Donatela).
CLC entered into a bareboat charter with a Vietnam-based firm for M/T Great Diamond and M/T Great Princess effective November 2016 and March 2017. Both were previously under voyage charter, which requires the Company to shoulder all costs but provide for higher revenues.
Bareboat charter yields lower revenues for ship owners because charterers shoulder all costs related to the operation of the vessels on a cost-plus basis. Such an arrangement, however, gives ship owners better and more stable gross margins.
Accordingly, the Company trimmed its costs of sales and services by 5% to P1.48 billion from P1.55 billion, following the commissioning of M/T Great Diamond and M/T Great Princess on a bareboat charter.
“As we continue to expand and improve our operations, we hope to sail further in providing better shipping and logistics services to customers; delivering more value to investors and business partners; and contributing bigger to our growing economy,” Mr. Damuy said.
The shipping and logistics business of the Udenna Group started in 2006 with the acquisition of a tanker in support of the operations of the country’s leading independent and fastest-growing oil company, Phoenix Petroleum Philippines, Inc.
Udenna has since grown its footprint in the shipping and logistics industry, owning the country’s largest tanker fleet in terms of capacity.
In March, CLC acquired a 28.15% indirect economic interest in 2GO Group and subsequently took over its management. It acquired two more companies – Starlite Ferries, Inc. and Worklink Services, Inc. – in November to reinforce its end-to-end shipping and logistics services.