Nenaco sees P1B income
MANILA, Philippines—Negros Navigation Co. Inc. (Nenaco) expects to yield a net income of about P1 billion this year, a turnaround from a net loss of half a billion pesos last year.
This is on the back of projected consolidated revenue this year of P15.5 billion, up from around P14 billion last year, according to Nenaco president and CEO Sulficio Tagud.
To do this, Tagud said the company would spend P2.5 billion to expand its logistics business under the brand 2GO, which is under Aboitiz Transport Systems Corp., or ATS.
“There’s still a lot of potential for growth in that area,” Tagud said.
Tagud also expects cargo and passenger shipping rates to rise this year as companies try to cope with the steady increase in oil prices.
He said shipping companies implemented several discounts for cargo and passenger clients last year to maintain market share.
“Members of the Philippine Ship Liners Association have reduced the discounts they gave for cargo and passenger rates last year. That’s the same thing we have to do if fuel costs continue to spike,” Tagud told reporters on Wednesday.
On average, he said current rates are 40 percent below the tariffs approved by the Maritime Industry Association (Marina).
“The discounts were given as a function of a competitive market,” Tagud said.
He said this gives shipping companies the space to adjust their rates without having to apply for increases with the regulator.
“Fuel prices are still manageable because we can still adjust rates,” Tagud said.
Nenaco is currently the country’s largest shipping group after it bought its chief competitor, ATS, from the Cebu-based Aboitiz family for over P4 billion.
“ATS is five times bigger than Nenaco in several aspects such as revenues, capacity and asset base,” Tagud pointed out.
The acquisition was funded by an equity infusion by state-run China-Asean Marine BV, which now owns 40 percent of Nenaco. The remaining 60 percent is owned by KGLI-NM, a joint venture between Kuwaiti Gulf Link Investments and Negros Holdings and Management Corp.
