Shippers cruise back to profit last year

MANILA, Philippines — Shipping players anchored their way back to safe waters last year by banking on the recovery of cargo trade to overcome post-pandemic risks, particularly peso depreciation and rising inflation.

Harbor Star Shipping Services Inc. reported a net income of P10.5 million in 2022, a reversal from its net loss of P158.01 million in 2021 as revenues jumped by 41 percent to P2.7 billion while expenses grew by 20 percent to P1.65 billion.

Earnings from harbor assistance jumped by 39 percent to P1.54 billion, signaling the return of shipping operations around the ports.

Harbor Star sources the bulk of its revenue from supporting vessels dock and undock.

Harbor Star recorded an 81 percent surge in salvage income to P470.97 million after completing rescue and retrieval projects for ships at peril.

It also grew its revenue from lighterage and towing to P118.83 million and P50.58 million, respectively.

Outside of shipping services, Harbor Star saw an eight percent increase in solar power generation earnings to P324.36 million, although it sustained a nine percent drop in construction revenue to P64 million.

Similarly, Lorenzo Shipping Corp. (LSC) flipped to a net income of P18.6 million in 2022, from a net loss of P84.58 million in 2021, and looks to maintain its financial health moving forward.

Last year LSC improved its revenue from freight services by 15 percent to P3.3 billion to cover for the nine percent uptick in expenses to P3.07 billion.

LSC said that cargo trade surged by a significant volume in 2022 after weakening at the height of the pandemic in 2021 and 2020.

However, LSC said that new economic challenges arose, from the war in Ukraine that pushed energy prices up, to the peso’s depreciation that weighed down on corporate spending.

To overcome these risks, LSC said it would optimize operations and improve services to serve the resurgent demand for cargo services as domestic consumption recovers.

The firm expects to stay in the green for as long as load factor and yield management are prioritized.

LSC also hopes to complete the transition of some of its processes to digital platforms, as it guns for increased productivity across business segments.

Harbor Star owns at least 60 tugboats that it deploys for pier assistance and lighterage services, while LSC provides containerized shipping in 10 ports, including the Port of Manila, across the archipelago.