Nenaco profit surges to P412M, exits rehab
Negros Navigation Co., Inc. posted a 124% increase in audited net income to P412 million in 2009 from P184 million in 2008 and successfully emerged from corporate rehabilitation after the Regional Trial Court of Manila ordered the termination of its corporate rehabilitation proceedings on account of the successful implementation of its rehabilitation plan. Management attributed Nenaco’s strong operating performance to “revenue-enhancing initiatives coupled with stringent cost-management measures” that it implemented during the year.
“Last year was not without challenges. Although fuel prices stabilized during the year, the series of typhoons that hit the country coupled with some accidents involving other shipping companies have somehow dampened the overall performance of the shipping industry,” Sulficio O. Tagud, Jr., Nenaco’s Chairman & Chief Executive Officer said.
Total consolidated revenues jumped to P2.45 billion last year from P1.98 billion in 2008 owing largely to increased cargo capacity. Company officials explained that Nenaco acquired, in the middle of 2009, two additional cargo vessels with a capacity of 300-TEU each. Freight business, which constitutes 68% of the revenue, rose 34% last year as compared to 2008.
“The acquisition of the two additional cargo vessels is in line with the company’s fleet modernization program. With the two additional freighters, Nenaco’s revenue mix now favors the cargo business,” Tagud quipped. “Nenaco is building up its fleet of cargo ships to strengthen its non-cyclical revenue base whilst pursuing its modernization program for its passenger business,” Tagud added.
The passage business has implemented aggressive marketing strategies in view of competition from the ‘RORO’ and the airlines’ discounted fares. As a result, Nenaco is transformed into a favorite low-cost sea passenger carrier resulting in higher load factors.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) jumped 33% to P579.3 million in 2009 from P342.6 million for the same period in 2008.
Owing to its strong market presence and profitable performance for the past three years, Nenaco exited from its corporate rehabilitation proceedings after successfully implementing its rehabilitation plan. “With the corporate rehabilitation behind us, our objective now is to sustain our profitability. We will continue to modernize our fleet and we will be relentless in finding ways on how to improve further our operations”, Tagud pointed out. Hit by the 1997 Asian financial crisis, Nenaco went into corporate rehabilitation in 2004.
Nenaco is owned by KGLI-NM, which is a joint venture company between Negros Holdings & Management Corp. and KGL Investments (a Kuwaiti Port fund).
