|
DEBT-saddled Negros Navigation Co. (Nenaco) reported a
good performance during the first half, partly due to a
vessel sale—a one-time gain—which reversed its losses
last year and helped surpass its targets for this year.
Sulficio
Tagud Jr., the company’s chairman and chief executive
officer, said Wednesday that the former publicly listed
shipping company posted earnings of P130 million from
January to June, a turnaround from the previous year’s
net losses of P235.93 million.
“We’re
now doing well,” Tagud, a former Ayala Land Inc.
executive, said. “Last year, we incurred losses
amounting to P460 million due to our compliance with the
international accounting standards (TAS). There are
assets that were reduced. But now we’re making money and
IAS-compliant.”
Tagud,
who also exposed the overpriced Diosdado Macapagal
Highway in Manila, said he was satisfied with the
company’s performance so far. Nenaco was only expected
to earn P85 million for 2007.
However,
Tagud admitted that part of the company’s profits came
from the $1-million sale of MV Princes of Negros to
Singapore-based Aston PTE Ltd.
The
company also said that passenger volume growth remained
stagnant, no thanks to shipping operators’ stiff
competition with airlines and other interisland
roll-on/roll-off vessels.
To cope,
Nenaco has shifted its marketing strategy to get the
lower end of the passenger market since the mid to the
upper end of the market have already shifted to budget
airlines, he said.
“Our
market, classes D and E, despite the difference of P200
to P300 in fares compared to airplanes, would still
choose ships, because P200 to P300 means a lot for
them,” he said.
Since
class C passengers can afford to shell out P500 more to
cover plane fare, they have chosen to fly instead, Tagud
said.
After
being allowed to temporarily suspend debt payments,
Nenaco will soon undertake a staggered debt-reduction
and restructuring program while preserving its assets to
generate earnings and undergo future growth.
It
currently owes an estimated P2.4 billion to various
creditors, including the Development Bank of the
Philippines, Export-Import Bank, Bank of Commerce and
EquitablePCI Bank, among others. |
