Net income of Chelsea Logistics quadruples on 2GO acquisition

MANILA, Philippines – The newly-listed logistics firm of Dennis Uy, Chelsea Logistics Holdings Corporation, saw its net income quadruple to P405.7 million in the first 9 months of the year, after it acquired equity shares in the parent firm of 2GO Group Incorporated.

The firm on Thursday, November 16, said in a statement that its net income surged to P405.7 million for the first 9 months of the year, from the P102.0 million it posted in the same period a year ago.

"Our investments into better shipping and logistics continued to yield results and create more value for our investors, business partners and other stakeholders," Chelsea Logistics president and chief executive officer Chryss Alfonsus Damuy said in a statement.

In March, Chelsea Logistics acquired 28.15% indirect economic interest in 2GO Group and subsequently took over its management. (READ: How to grow a business, according to Dennis Uy)

It bought two more companies – Starlite Ferries Incorporated and Worklink Services Incorporated – in November to reinforce its end-to-end shipping and logistics services.

Its increased net income reflected the P168.1 million recognized by Chelsea Logistics as equity shares in the net income of Negros Navigation Company Incorporated and 2GO Group.

Chelsea Logistics booked 9% increase in total revenues to about P2.3 billion in the the first 9 months of 2017, from the P2.11 billion it recorded a year ago.

Its freight revenues surged by 43% year-on-year to P646.4 million, mainly driven by the commercial operations of M/V Trans-Asia 12. The vessel started plying the Manila-Cebu route in August 2016.

The firm said passage revenues also increased by 10% to P339.5 million in the first 9 months of the year, following an increase in the number of passengers.

Tugboats fees, meanwhile, rose by 15% to P192.7 million on the back of a 51% increase in port calls at Calaca Seaport as well as the operations of Fortis Tugs Corporation in Keppel Batangas during the entire period.

The higher revenues offset the 4% decline in charter fees to about P1.09 billion in the first 9 months of the year.

Decline in charter fees

Chelsea Logistics said the decrease in charter fees primarily resulted from the change in the nature of agreements governing the chartering of M/T Great Diamond (formerly Chelsea Thelma) and M/T Great Princess (formerly Chelsea Donatela).

CLC entered into a bareboat charter with a Vietnam-based firm for M/T Great Diamond and M/T Great Princess effective November 2016, and March 2017, respectively.

The firm said both were previously under voyage charter, which required Chelsea Logistics to shoulder all costs but provide for higher revenues.

"As we continue to expand and improve our operations, we hope to sail further in providing better shipping and logistics services to customers; delivering more value to investors and business partners; and contributing bigger to our growing economy," Damuy said.

The shipping and logistics business of the Udenna Group started in 2006 with the acquisition of a tanker in support of the operations of Phoenix Petroleum Philippines, Incorporated.

Udenna has since grown its footprint in the shipping and logistics industry, owning the Philippines' largest tanker fleet in terms of capacity. – Rappler.com