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Dennis Uy’s Chelsea sinks deeper into red ink: P3.312B loss in 2020, nearly half from losses in DITO, 2GO

Bilyonaryo Dennis Uy’s debt-saddled shipping and logistics firm sank deeper into red ink as it lost nearly P300 million a month in 2020.

Chelsea Logistics and Infrastructure Holdings reported a staggering P3.312 billion loss in 2020, 140 percent more than its combined losses in the preceding two years – P832 million in 2019 and P551 million in 2018.

READ: Dennis Uy adds new vessel to Chelsea’s fleet

“The measures taken by the government to contain the virus have negatively affected the group’s results in the operating period. Community quarantine imposed by the national government starting March 15, 2020 resulted to travel restrictions via land, sea and air transport. Although movement of essential goods were allowed, cargo volume dropped considerably in the first two and a half months of the two enhanced community quarantine (ECQ) periods. The gradual lifting of restrictions resulted to slight improvement in the group’s operations which is still far from its pre-pandemic operating results,” said Chelsea.

Revenues dropped by P2.541 billion or 35 percent to P4.679 billion in 2020, specifically in passenger sales (down 65 percent), tankering (down 41 percent), and freight (own 22 percent).

Chelsea continued to incur costs even as most of its vessels (worth P1.9 billion) were on temporarily idle or on laid-up status.

Chelsea’s return on equity cratered to minus 35 percent in 2020 from 6.7 percent in 2019 while its gross margin shrank to 4.4 percent from 28 percent.

What compounded Chelsea’s financial woes are P1.046 billion losses from its investments in other Uy firms – P691 million from DITO Telecommunity, P205.8 million from 2GO, and P149.4 million from DITO Holdings.

Chelsea was also forced to allocate P762 million as provision for expected credit losses (due to deterioration in collectability of trade receivables) and book P333 million in losses from the remeasurement of its investment in KGLI-NM Holdings, Uy’s vehicle in controlling 2Go in 2018.

It could have been worse for Chelsea if it wasn’t able to sell its stake in DITO for P984 million. Chelsea is also selling out its shares in 2GO to the SM group.

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