01 February 2013

2 European firms to invest $600M in shipbuilding

Subic Bay Metropolitan Authority chairman Roberto Garcia yesterday reported that two European companies will invest $600 million building small ships in Subic, encouraged by the success of Hanjin Heavy Industries.

Garcia declined to elaborate further, saying that inquiries were made last year. Garcia said during a break in the Philippines Ports and Shipping Conference at the Manila Peninsula yesterday that Subic has become an ideal investment destination for maritime and tourism.

He also reported that SBMA was able to turn around from 2011’s losses of P1.2 billion to profit of P789 million last year.

Garcia attributed the turnaround to increased revenues, reduced operating expenses and a favorable exchange rate.

SBMA raised 16 percent more in revenues last year than in 2011 on the entry of new major projects in seaport operations such as the Vale ore transshipment project and the start of commercial operations of the Phase 2 of the New Container Terminal.

Coupled with an aggressive collection campaign on existing accounts, new revenue streams were created through increased admission fees on importations and the imposition of fees to defray municipal expenses that were previously subsidized.

Operating expenses decreased by 7 percent versus 2011, as the SBMA implemented a comprehensive austerity program.

Salaries similarly dropped by 7 percent as a freeze hiring policy was implemented and the manpower count decreased. Repairs and maintenance expenses likewise fell 46 percent and advertising expenses were slashed by 35 percent from 2011 levels. As a result, earnings before interest, taxes and depreciation (EBITDA) jumped from P329 million in 2011 to P629 million – a 91 percent increase.

Due mainly to favorable exchange rates, SBMA registered an unrealized foreign exchange gain of P1.1 billion in 2012, versus the previous year’s forex loss of P566 million. (Irma Isip, Malaya)