| BY year's end, the Philippines’ largest shipping company will revive a plan to give cash payouts to its shareholders. The dividends which will be sourced from the sales proceed of two vessels and other cost-cutting measures, said Enrique Aboitiz Jr., president and chief executive officer of the Aboitiz Transport System Corp.
In a stockholders’ meeting Thursday, Aboitiz told reporters that the company, which operates SuperFerry vessels, not only expects to be debt-free by yearend, it will also have cash amounting to anywhere between P800 million to P1 billion.
The said plan forms part of the Aboitiz group’s goal to create a “cash rich, debt-free company with a strong balance sheet,” after the group’s shipping arm has been burdened by high- fuel costs and reduced number of passengers.
Travelers have continued to shun sea transport as a result of cutthroat competition posed by other smaller operators and lower fares by budget airlines.
Aboitiz also said that the company will be spending P600 million to P700 million this year to allow its vessels to carry more cargo by converting areas meant for travelers. This year alone, four SuperFerry vessels will be converted to increase its operational efficiency.
With the sale of two SuperFerry vessels, the company’s fleet will be reduced to only nine from 14.
Aboitiz also said its joint venture with the two affiliates of A.P. Moeller Group—MCC Transport Singapore and Mercantile Ocean Maritime Co. (Filipinas) Inc—is expected to cover freight revenues lost from the sale of two SuperFerry vessels.
While the Aboitiz group owns 33 percent of the joint venture, MCC Transport owns 40 percent and Mercantile controls 27 percent.
Besides selling three vessels last year, Aboitiz Transport also disposed of its stake in a cargo handling service company in Davao, helping the company post twice as much earnings than the previous year.
For 2006, Aboitiz Transport reported that profits reached P197.3 million, an almost 200-percent hike over the previous year’s P65.7 million.
The company said it had delivered SuperFerry 17 to its new owner this month, which meant it would report higher net income figures for the second quarter.
For the first quarter ending March 31, the company reported a net loss of P30.8 million, compared to a loss of P192.4 million a year earlier. Revenues for the same period were at P2.5 billion, unchanged from last year’s.
Aboitiz Transport share went up to P1.82 each during Thursday’s trading at the Philippine Stock Exchange, up from P1.80 at the close on Wednesday.
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