- August 30, 2015
- News & Events, Press Releases
Harbor Star income fell 80% in H1
PROFITS of tugboat operator Harbor Star Shipping Services Inc. tumbled during the first half of the year on weaker revenues as it had to stop commercial operations in one of its profitable ports and the company still has to acquire salvage products for the year.
The company said in its report that its income for the period ending June was at P24.9 million, an 80-percent drop from last year’s P124.3 million.
For the second quarter alone, the company actually had losses of P4.35 million compared with last year’s P17.99 million in income, still on lower revenues as its costs were higher.
Service revenues for the first half of the year were down by 17 percent to P461.59 million from the previous year’s P555.74 million.
The company said it had lower income from towing services of a mere P12.4 million from last year’s P75.6 million.
Harbor-assistance revenues fell P34.5 million from the previous year, partly as a result of the fall in net revenues from harbor assistance of P34.5 million because of stoppage of commercial operations in Bohol, one of its major income-generating ports in 2014.
It also experienced a sharp decline in ship calls in its Manila International Port, where it earns the most, while it had lower to nil adjustment in its tariff rates due to diesel-price rollbacks.
“The group has yet to acquire salvage projects in 2015, while for the six months ended June 30, 2014, [Harbor Star] already generated P37.5 million in salvage revenues,” it said. Lighterage services amounted to P114.4 million, or more than double that of the previous year.
The company is looking for growth outside of the Philippines as business at its home port is slowing.
Company chairman Geronimo Bella Jr. said earlier that Harbor Star is in talks with the main service provider of the Indonesian state-owned power plant to become one of the firms that will deliver coal to the facility for the next 15 years.
Bella said that with the deal, it may invest some $10 million for the purchase of 10 tug and barge tandem that will be used for the project, which could be the company’s biggest overseas venture so far.
Leah Vasquez, the company’s chief finance officer and compliance officer, said that a follow-on offering at the Philippine Stock Exchange is one of their many options but they may also do a project finance with a bank.
“China Trust [Banking Corp] is our main bank here. They have a branch in Jakarta and they will support us in the deal. But follow-on offering is also on the table because the deal is huge for us depending on the volume [of coal] that we will take,” she said.
Vasquez said the company will buy second-hand vessels from either Japan or Singapore, aged between 5 and 15 years.
From the 10 sets of tugboats and barges, each with a capacity of about 8,000 tons, the company may haul some 6 million metric tons of coal per month.
The coal will also come from various parts of Indonesia, the world’s largest archipelago with more than 17,000 islands.
The said Indonesian contract is part of the company’s push to expand its operation in top Southeast Asian nations such as in Malaysia and Vietnam as its business at home is slowing down due to the ongoing port congestion.