Lorenzo Shipping posts strong gains in 2000

Lorenzo Shipping Corp. (LSC) turned in a strong performance last year despite the economic uncertainties brought about by the much publicized impeachment trial of former President Joseph Estrada.

Keeping costs under tight control, LSC realized a net income of P24.7 million in 2000, more than 700 percent higher than the P3-million net profit which the company registered in 1999.

Reporting to the company’s stockholders, LSC president Romeo L. Malig said net freight revenue improved 21 percent from P717 million in 1999 to P870 million last year. Malig said this was brought about by the combined effects of a 12-percent increase in lifting and a nine-percent hike in freight rate due partly to the automatic fuel rate adjustment (AFRA) and the general rate increase approved by Marina during the year.

In addition, miscellaneous income increased by P41 million or 111 percent due to improved recoveries from auxiliary services rendered to clients by the company, Malig said.

The results, according to Malig, would have been more impressive had it not been for a 17-percent increase in direct operating cost which was due largely to a series of increases in the price of fuel which accounts for 37 percent of the company’s operating costs.

Other direct operating costs which registered increases during the year were voyage expenses, manpower cost and depreciation.

Administrative and general expenses also increased due to the effects of increases in manpower, increased insurance cost and fees and licenses and other administrative charges.

Malig also reported that interest and financial charges significantly increased by 93 percent for P70 million to P135 million mainly because of the conversion of dollar accounts into peso loans with Citibank which carry higher interest rates.

This, plus the contraction of a P60-million loan from Robinsons Bank to partly finance an option to purchase two vessels, raised the company‘s long-term obligations by about P579 million, Malig reported.

As an indication of the company’s improved standing, Malig said their capital position at year-end 2000 grew by a significant 17 percent amounting to about P145 million resulting form asset evaluation and net income for the year.

"Because of the expected surge of liftings in the coming years, we fully expect our shareholders to support our growing capital requirements for continuing business growth and profitability," he added.

Because of the appraisal of vessels and income registered during the year, the company‘s debt-to-equity improved by 0.02 from 1.43 in 1999 to 1.41 in 2000.

In conclusion, Malig said: "We are highly optimistic about our prospects ahead given the improvement in our bottom line this year. With a business plan and strategy hinging on a more innnovative human resource program, we’ve established a momentum that will continue to see our company overcome the challenges of the years ahead and stay on course."