Lorenzo Shipping allots $12 million for refleeting program

MANILA, Philippines - Lorenzo Shipping Corp. has allotted $12 million over the next five years for the second leg of its refleeting program, the publicly-listed company’s top executive said.

Lorenzo Shipping president Roberto Umali said the shipping firm will replace two more vessels valued at around $6 million each.

“We will be replacing two more old vessels because we would not like to operate vessels that are more than 25 years old,” he explained. 

Lorenzo revealed that the refleeting program will be funded through a combination of equity and domestic bank loans.

He added that the vessels that will replace the two oldest vessels of the company will have the same capacity as that of its newly-acquired vessel MV Lorcon Dumaguete.

Launched last week, Lorenzo’s new vessel has a capacity of 400 twenty- foot equivalent units (TEUs) and has replaced the 37-year old MV Lorcon Luzon. The vessel’s total cost is $6 million, including modification costs.

The company owns and operates a fleet of seven vessels deployed to the key ports in Manila, Visayas and Mindanao, and with capacities ranging from 200 TEU to 426 TEUs.

MV Lorcon Davao, now 31 years old, is the oldest in the company’s fleet, followed by MV Lorcon Zamboanga at 25 years.

Umali said Lorenzo Shipping has not yet recovered from the global economic crisis despite the improving cargo volumes experienced in the last few months as fuel cost has almost doubled this year.

“We have no plan to expand and we may only go to new routes. Lorenzo Shipping does not project a “spectacular growth” in the next three years,” he pointed out.

Umali also said that they are closely watching their performance in the second half to avoid incurring losses again.

“We are reducing costs and shortening dry-docking,” Umali said.

Lorenzo Shipping earlier reported a three percent decline in its net profit for the first half of 2010 from P52.46 million in the same period last year.

Revenues were likewise down by six percent to P739.58 million from P784.6 million last year.