Chelsea incurs P354 million loss in Q1 as COVID hits

MANILA, Philippines — Dennis Uy’s Chelsea Logistics and Infrastructure Holdings Corp. incurred a net loss of P354 million in the first quarter  as it suffered heavily from the impact of the coronavirus disease 2019 (COVID-19).

The first quarter result was a complete turnaround from the same period last year when Chelsea posted a net income of P139 million.

Chelsea said the quarantine imposed to control the spread of COVID-19 in several cities and provinces starting March 15 significantly caused a slowdown in the company’s operations, which coincidentally was also the start of the shipping industry’s peak season.

“The significant drop was primarily attributable to the ECQ (enhanced community quarantine) imposed starting March 15, 2020 as well as the group’s share in the net loss of associates Dito and 2GO totaling P133 million,” it said.

From a revenue standpoint, however, the group managed to eke out a one percent gain to P1.61 billion.

Tankering revenues, which consist of charter fees and standby charges, saw the biggest year-on-year drop of 24 percent to P401 million as a result of the unscheduled downtime of MT Chelsea Providence, the group’s medium range tanker.

The company’s logistics business reported a 10 percent decline to P106 million as a result of the restriction of land, air and sea transport to and from Luzon, brought about by the Taal Volcano eruption and COVID-19 pandemic.

Meanwhile, passage revenues rose 39 percent to P413 million due to the consolidation of the Supercat Fast Ferry Corp. which was acquired by the company in October last year.

Tugboat fees also went up by six percent to P86 million.

In response to the ongoing challenges, Chelsea immediately revisited future strategies, which include strengthening balance sheet and aggressive fixed asset management by slashing planned capital expenditures and disposing of aging and underperforming vessels.

To scale up work efficiencies, Chelsea is undergoing workforce rationalization to restructure support functions and right-size existing workforce.

“We are still firming up the numbers as most are still off from work due to quarantine,” Chelsea president and chief executive officer Chryss Alfonsus Damuy said when asked about the right-sizing of its workforce and reduction of capex.

Damuy said Chelsea has close to 3,000 employees to date. Prior to the COVID-19 outbreak, he said the company has earmarked a capex budget of P2 billion this year.