2GO swung from a P1.14bn loss to P312m profit under SM Investments

2GO Group, the Philippines' largest shipping and logistics operator, had lost money for years and was hit again by the pandemic. Its net loss for the first nine months of 2020 was P1.04bn, worse than the P972m loss a year earlier, as shipping and passenger volumes collapsed under lockdowns.

The turning point was ownership. SM Investments, already holding 30.49% of 2GO, agreed in March 2021 to buy Chelsea Logistics' 31.73% stake at P8.50 per share and launched a mandatory tender offer at the same price, making the loss-making carrier an SM subsidiary. Management under Frederic DyBuncio then pushed 'financial discipline', cost control and fleet modernization, including two new fuel-efficient RoRo passenger ships and new IT and vehicle-routing systems.

The bets paid off as the economy reopened. 2GO posted P108.7m of net income in Q2 2022, reversing a P308.89m loss, and P74.2m for the first half against a P600.69m loss, with revenue up 11% to P8.69bn. Shipping revenue jumped 67% in the quarter, boosted by volumes to Visayas and Mindanao and a more than doubling of passenger travel.

For full-year 2022, 2GO reported P312m of net income against a P1.14bn loss in 2021, with revenue up 25% to P19.3bn. DyBuncio credited both the demand recovery and 'structural changes and financial discipline' that management said were permanent parts of the business.

Revenue rose 25% to P19.3bn in 2022 and net income was P312m, a turnaround from the P1.14bn loss in 2021; first-half 2022 already swung to P74.2m from a P600.7m loss.

Making 2GO an SM subsidiary in March 2021 gave it patient capital and group backing at the worst point of the pandemic.

Fleet and IT investment — new fuel-efficient RoRo ships and routing systems — cut costs while demand recovered.

Structural changes embedded before reopening meant higher volumes converted into profit rather than just revenue.

A fix needs a stronger owner plus structural change: SM took control, imposed financial discipline and invested in new ships and IT, so 2GO was ready when the economy reopened and profit followed.

2GO carried the momentum into 2023-24, benefiting from logistics demand in Visayas and Mindanao and from growth in cold chain, forwarding and e-commerce fulfillment. The case became a Philippine example of a conglomerate turning around a chronically loss-making national asset by changing control and discipline rather than abandoning the business.