Trade pickup buoys Lorenzo Shipping volumes
MANILA -Lorenzo Shipping Corp. is expecting to keep the momentum this year as it projects robust revenue growth amid the expected increase in cargo volume with the further resumption of trading activities.
Reynold John Madamba, the listed company’s president, told the Inquirer they were estimating a 13-percent improvement on the topline figures as demand for shipping services grows given the rise in domestic consumption.
“Target growth in net income for 2023 vs 2022 is 400 percent because we expect the full effects of our ongoing cost rationalization program,” he added.
In 2022, Lorenzo Shipping handled 104,718 twenty-foot equivalent units (TEUs). Madamba expects this to grow to 109,220 this year.
The 2022 financial report of the shipping company showed that it had returned to profitability with P18.6-million net income, a reversal of P84.58 million in net losses in 2021. This was supported by its freight revenues growing by 15 percent to P3.30 billion for the period from P2.87 billion in 2021.
Gross profit grew by 355 percent to P234.39 million last year.
“Despite cargo volume significantly increasing in 2022 compared to the pandemic years of 2021 and 2020, the company faced the enormous challenge of recovering from the drastic escalation in cost brought about by unstable fuel price changes, elevated inflation, peso depreciation, high-interest rates, and inefficiencies brought about by port congestion,” the company noted.
Previously, Madamba said that the shipping sector was likely to further regain footing this year with the easing of mobility restrictions but stressed that rising consumer prices pose risks to its growth.
He said the industry might see its cargo volume returning to prepandemic level this year.
To achieve prepandemic levels, the cargo volume must reach 265.88 million metric tons (MT), which is the figure booked in 2019. Cargo throughput was at 261.62 million last year.
“The problem is, we’ve had several months of very high inflation rates. And as you know, whenever there is a high inflation rate, consumer spending tends to taper down a bit,” he explained earlier.
Less consumer spending is seen to have an adverse impact on the demand for the cargo shipments as well because enterprises may slow down on their orders.
This year, the Philippine Ports Authority is projecting 7- to 8-percent growth in both cargo throughput and container traffic.
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