2GO Group profit up 24% as logistics expansion continues

TRANSPORT SOLUTIONS provider 2GO Group, Inc. on Monday said profits increased by an annual 24% last year, as it continued to expand its logistics business.

The country’s largest fully integrated supply chain enterprise and end-to-end solutions provider, said in a statement that its consolidated net income for 2016 reached P1.34 billion from the P1.08 billion seen in 2015.

2GO said operating income grew 40% to P2.53 billion last year from P1.81 billion in 2015, while operating margin improved to 13% from 11% in 2015.

“Management attributes this strong performance to sustained top-line growth coupled with improved cost efficiencies,” the logistics company said.

Total consolidated revenues last year increased by 17% to P19.28 billion from P16.42 billion in 2015.

2GO’s non- shipping business outpaced the shipping segment. The company said last year’s growth was driven mainly by a 30% jump in revenues from the non-shipping segment to P10.32 billion as it increased service offerings and improved market share from major accounts.“With its robust growth, the non-shipping business accounted for 54% of the total revenues, up from 48% in the previous year,” 2GO said.

On the other hand, shipping revenues rose 6% to P8.96 billion due to higher volumes as well as improved vessel turnaround for both large and medium-sized roll-on/roll-off passenger and freight vessels.

Meanwhile, total costs and expenses grew by 15% to P16.74 billion on account of cost efficiency measures and partly due to relatively low fuel prices during the year.

2GO is the country’s largest integrated supply chain operator whose businesses include shipping, freight forwarding, warehousing and express delivery services.

Earlier this month, SM Investments Corp., the holding firm of Henry Sy, Sr. — the country’s richest man — announced its entry in 2GO. SMIC purchased a minority stake in the company through a 34.5% interest in Negros Navigation, Inc, which owns 88.31% of 2GO.

The logistics firm last week announced top management changes, including the appointment of Dennis A. Uy as new president and CEO, following the retirement of Sulficio O. Tagud, Jr. from the board, among others.

Mr. Uy is the chairman of Udenna Corp., the parent of Davao- based Phoenix Petroleum Philippines, Inc. and Chelsea Logistics Corp.

In September last year, Udenna announced its entry in 2GO Group by acquiring the 32% stake of KGL Investment B.V., a company based in The Netherlands. 2GO named Mr. Uy as part of its board last February. —