Despite widening losses, Chelsea hopeful of recovery

MANILA, Philippines — Chelsea Logistics and Infrastructure Holdings Corp. is hoping for a recovery this year after its losses widened in 2021.

In a disclosure, Chelsea said its net loss expanded by 18 percent to P3.91 billion due to nonrecurring items which include the sale of assets below book value.

Consolidated revenues dropped four percent year-on-year to P4.47 billion on the back of declines in the group’s passenger, tanker and tugboat businesses.

These declines were offset by the strong growth in the freight and logistics segments.

Chelsea said the freight business continued to recover with a 30 percent year-on-year increase in revenues to P2.72 billion, already surpassing the P2.69 billion in revenues recorded in 2019, which was prior to the COVID-19 pandemic.

The group’s logistics business likewise saw strong results with revenues rising by 41 percent to P519 million.

Freight accounted for 61 percent of the group’s consolidated revenues, followed by logistics at 12 percent.

Chelsea said its passenger business remained challenged due to restricted travel protocols implemented not just by the national government but also by local government units of the areas where the group has port calls.

It said the tankering business also continued to experience difficulties in recovery due to restrictions in the movement of petroleum products as well as the lower demand from customers.

However, Chelsea said there are some signs of recovery in these segments, especially for passage with its year-on-year revenue decline slowing down from 65 percent in 2020 to just 42 percent in 2021 with P293 million.

“We remain very encouraged in seeing pockets of recovery in the industry. This is despite outside factors like the peaks in the number of active COVID-19 cases last year and the Omicron variant surge at the beginning of this year,” Chelsea president and CEO Chryss Alfonsus Damuy said.

“We are hopeful of a further recovery this year while we need to carefully monitor world oil prices as they will certainly have a negative impact on our margins,” he said.

On the financial front, Chelsea chief financial officer Ignacia Braga IV said the company has reduced and continues to manage all operating expenses without sacrificing safety and standards.

“We continue to work closely with our creditors, suppliers and other stakeholders to strengthen our balance sheet through win-win solutions,” Braga said.

Chelsea said its application for the amendment of its articles of incorporation to hike its authorized capital stock from P2 billion to P3.5 billion and the change in the feature of the preferred shares from non-convertible to convertible preferred shares had been approved by the Securities and Exchange Commission on April 4.

Subscriptions to the increase in authorized capital stock would provide additional funds for current and future projects, as well as additional working capital for Chelsea.