NENACO profit surges 50% to P1.6B
NEGROS NAVIGATION Company Inc. (NENACO), the controlling shareholder in listed logistics company 2GO Group Inc., saw a 50% rise in its profits last year, driven by the strong growth of its non-shipping businesses.
In a statement, NENACO said its consolidated net income after tax jumped 50% to P1.61 billion in 2016 from P1.07 billion in the prior year. Its operating income surged 55% to P2.84 billion.
“Management attributed the strong performance to the sustained revenue growth of all the business units within the group, coupled with the implementation of stringent cost-control management,” the shipping group said.
Total consolidated revenues rose 18% to P19.40 billion last year from P16.49 billion.
“The non-shipping group took up the cudgels by growing a hefty 30% in revenues compared to the 6% growth of the shipping group. The bolstered service offerings of the non-shipping group plus the expansion of the group’s wallet share with its major accounts accounted for the increase,” NENACO said.
On the other hand, it noted that the group’s growth came from “higher volumes and from improved vessel turnaround for both large- and medium-sized ropax vessels.”
NENACO noted its revenue mix continued to tilt towards the non-shipping segment, which now accounts for 54% of the total turnover.
The shipping group said maintaining a “tight, calculated hold” on its resources, the increase in revenues far outstripped the 13% increase in total costs and expenses, leading to the improvement in margins as relatively low fuel prices during the period also helped managed the group’s expenses.
Earlier this month, SM Investments Corp. announced its entry in 2GO. SMIC purchased a minority stake in the company through a 34.5% interest in NENACO, which owns 88.31% of 2GO.
The logistics firm last week announced top management changes, including the appointment of Dennis A. Uy as new president and CEO, following the retirement of Sulficio O. Tagud, Jr. from the board, among others.
2GO Group on Monday said its consolidated net income increased by an annual 24% to P1.34 billion from the P1.08 billion seen in 2015 as it continued to expand its logistics business. -- Imee Charlee C. Delavin