In an interview with reporters yesterday, WG&A president Enrique "Endika" Aboitiz said the bulk of the capital budget or P1.2 billion is being spent for the acquisition of two new ships – Superferry 17 and 18 – to support President Arroyo’s Strong Republic Nautical Highway (SRNH).
The SRNH is a network of terminals all over the country which is expected to bridge the food baskets of Mindanao with the rich consumer markets of Luzon.
With the purchase of the new vessels, WG&A expects to further improve its services to major ports and islands with increased frequency.
Aboitiz said the remaining P800 million will be used to fully automate its system and further improve its services.
He said the company sought a P1-billion loan from the Development Bank of the Philippines to acquire bigger and more modern ships.
Aboitiz said WG&A’s objective is to raise the standards of domestic shipping to best practice levels in the region and gradually in the rest of the world.
According to him, the company expects to register revenues of P8 billion this year, higher than the P7 billion reported in 2002. The increase will come from rate increases, better paying cargoes, and higher cargo sales.
For the first quarter this year, WG&A reported a 47 percent decline in profits from P94.56 million in 2002 to P50.11 million this year. Although it registered an eight percent increase in its consolidated revenues to P1.8 billion, this was offset by higher fuel costs and higher repairs and maintenace.
WG&A said the revenue growth was achieved despite the reduction in the number of voyages completed during the quarter brought about by the scheduled drydocking of two ships.
Passage operations posted a revenue growth of seven percent from P783 million to P835 million. Freight operations also posted an increase in revenue of 10 percent to P948 million despite a reduction in cargo capacity. Other income includes a P12 million gain from the sale of two tied-up vessels.
The company’s total operating and administrative costs for the first quarter this year rose 12 percent to P1.7 billion, mainly due to higher fuel costs. Average fuel price per liter went up by 35 percent. As a result, fuel expense grew to P477 million from P370 million.
In keeping with the firm’s safety standards, vessel repairs and maintenance costs increased by 31 percent from P85 million to P111 million as WG&A continuously invests in the maintenance of its fleet.
WG&A operates 22 vessels nationwide and is the largest provider of domestic ferry transportation in the Philippines on both the passenger and cargo business.
The firm was formed via a merger in 1996 of William Lines Inc., Carlos Gothong Lines Inc., and Aboitiz Shipping Corp. WG&A is now 92 percent owned by the Aboitizes after the Gothong family decided to sell out its interest in the shipping firm last year.