Aboitiz Transport System Corp. (ATS) registered total consolidated revenues of P9.4 billion for the first nine months of 2008, a 13-percent improvement from the P8.3 billion generated in the same period last year.
Freight revenues, which constitute the bulk of revenues, increased 14 percent to nearly P5.7 billion in 2008. Contributing to the rise in freight revenues is its international charter as well as the increase in rates in the domestic cargo business.
Passage revenues totaled P2 billion, six percent lower than last year’s P2.1 billion. Company officials explained that the decline is largely a result of the overall reduction in passenger ferry capacity brought about by vessel sales and the conversion of excess passage capacity of some vessels to freight.
It was also pointed out that two vessels underwent repair during the second quarter of the year. Moreover, the industry continues to face fierce competition from the airlines, the officials added.
ATS assets maintain high utilization rates with passenger and freight at over 70 percent and 90 percent, respectively. However, the real purchasing power of customers is unable to absorb the price increases that would be necessary to cover the rapid and consistent increases in the price of fuel.
The development of the company’s supply chain management solutions business led the 57 percent growth in service fees, from P903.5 million in 2007 to P1.4 billion in 2008.
Officials pointed out that ATS continues to expand its value-added business. Aboitiz One Distribution Inc.’s new warehouse with 21,000 pallets positions located in Taguig City is expected to be completed in the last quarter of 2008. In June 2008, Aboitiz One Inc. purchased Scanasia Overseas Inc., a company engaged in the business of sales, marketing, warehousing and transportation of temperature-controlled and ambient food products to its customers in the Philippines.
The company believes much of its future will lie on its value added businesses. Freight capacity is being filled up with its own supply chain and value added business reducing the reliance of spot and market cargo that is more price driven than value driven. Today, ATS’ own value added cargo comprises 40 percent of the total cargo business.
Meanwhile, total costs and expenses jumped 17 percent, resulting to a net loss of P49.4 million compared to a net income of P480.8 million in 2007. Charter-related expenses and higher fuel are among the major contributors to the rise in costs.
Furthermore, ATS last year registered an after-tax gain on disposal of vessels of P402 million.
Fuel costs continue to be a challenge for the company. To help mitigate the negative impact of this to its margins, the company has been transforming itself into a value-added service organization with its efforts focused on integrating its services to build complete supply chain management solutions. – Mary Ann Ll. Reyes