Acquisitions Boost Chelsea Logistics’ Income

CHELSEA Logistics Holdings Corp. (CLC) posted a 17.5% growth in net profit last year to P161 million as revenues more than doubled after the acquisition of shipping companies and related businesses.

In a disclosure to the stock exchange, the company said last year’s profit from 2016’s P137 million included a one-time gain on bargain purchase valued at P158 million.

Chryss Alfonsus V. Damuy, CLC president and chief executive officer, said the capital raised from the company’s initial public offering on Aug. 8, 2017 allowed the significant expansion of businesses and operations.

“As a result of the acquisitions during the last quarter of the year, we were able to increase our market share not only in the shipping industry but covering the end-to-end supply chain solution of the logistics industry,” he said.

CLC described 2017’s profit growth as “tempered” after the near 100% increase in financings costs attributable to loans availed in proportion to the purchase of some of the new vessels.

Last year, the company generated P3.9 billion in revenues, which it said was 140% higher than 2016’s. It attributed the increase to the acquisition of a stake in 2GO Group, Inc., as well as Starlite Ferries, Inc. and Worklink Services, Inc. The acquisitions resulted in additional freight revenues of P1.3 billion, passage revenues of P800 million, and P200 million from logistics services.

Revenues from tugs assistance services doubled to P263 milion in 2017 from P118 million in 2016, also a result of the acquisition of Davao Gulf Marine Services, Inc.

CLC in March last year acquired a 28.15% indirect economic interest in 2GO Group, taking over its management.

It also acquired last year 100% of Starlite Ferries, a Filipino company with 14 vessels, as well as WorkLink Services, Inc., a cargo forwarder for food, garments, among others.

Mr. Damuy said CLC expects the acquired vessels to bring profitability starting this year.

In late 2017, CLC through its subsidiaries purchased four more vessels and ordered more during the first quarter. It expects deliveries within the year.

Earlier this year, it signed a contract with Kegoya Shipyard for the construction of one brand new roll-on roll-off passenger ship with an option to order an additional three units with delivery dates from 2019 to 2020.

CLC said that as of end-2017, the market capitalization of the company was at P16 billion based on the closing price of P8.78 per share.

On Wednesday, shares in the company jumped 6.29% to close at P7.60 each.

 

Source: https://www.bworldonline.com/acquisitions-boost-chelsea-logistics-income/

Author: Patrizia Paola C. Marcelo (Business World)

Published Date: March 1, 2018