Aboitiz Transport incurs losses due to high fuel costs

MANILA, Philippines - Aboitiz Transport System Corp. (ATS) posted losses in the past nine months as the surge in fuel prices in the middle of the year inflated operations costs for the country's oldest shipping firm. In a disclosure to the Philippine Stock Exchange (PSE) on Thursday, Aboitiz Transport Corporate Information Officer Lilian P Cariaso said the company posted a P49.4 million net loss attributable to equity holders in the January to September period. This is a reversal from the company's P402-million net profit in the same months last year, which was boosted by a tax gain following the sale of its vessels. "Fuel costs continue to be a challenge for the company. To help mitigate the negative impact of this to its margins, the company has been transforming itself into a value added service organization with its efforts focused on integrating its services to build complete supply chain management solutions," Cariaso said. It may be recalled that world oil prices peaked at $147 a barrel in July before steadily declining to current prices. Despite challenging times, Aboitiz Transport managed to post consolidated revenues amounting to P9.4 billion in the past nine months, 13 percent higher than its sales in the same period last year. Bulk of the company's revenues came from its freight business, which posted a 14 percent growth at close to P5.7 billion from January to September. Aboitiz Transport's passenger business, on the other hand, registered a six percent decline to P2 billion compared to last year's P2.1 billion. The nine-month performance of Aboitiz Transport did not come as a surprise to rival and soon-to-be affiliate Negros Navigation Co. (Nenaco). Nenaco's parent firm, KGLI-NM Holdings, Inc. is set to take over the majority stake of the Aboitiz family in Aboitiz Transport by January 2009. "We have factored that in already. This is a very difficult situation for the shipping industry," Tagud said in a phone interview. The businesses of Aboitiz Transport and Negros Navigation still will be run as separate brands should the merger succeed next year. Operations, however, will be integrated to cut costs and boost profitability, Tagud said. - GMANews.TV