MANILA - Profits of Aboitiz Transport System Corp. (ATSC) increased significantly during the first 6 months of 2009, driven mainly by declining fuel prices.

In a disclosure to the Philippine Stock Exchange on Monday, ATSC said its net income swelled to P496.1 million as of end-June from only P16.8 million in the same period last year.

The company, which withdrew from talks to sell the business to a foreign-backed consortium in April, said its consolidated revenues grew 3% to P6.2 billion during the 6-month period.

Earnings before interest, taxes, depreciation, and amortization nearly tripled to P1.2 billion from P411 million as ATSC's fuel cost dropped 28% due to declining fuel prices.

Freight business, which account for bulk of ATSC's revenues, dropped 19% due to the decline in its international charting business. The company's domestic freight shipping operations, on the other hand, rose 16% on the back of higher average freight rates.

“Freight capacity is being filled up with its own supply chain and value added business which experienced significant increases in margins and registered 228% growth to total P789.1 million during the period,” ATSC said. The company said the expansion has been strengthened by Scanasia Overseas Inc., a supply chain company that ATSC purchased in June last year.

Revenues generated from its passenger businesses, which include ancillary revenues, rose 5% to P1.6 billion. ATSC said the passage business has been transformed into a low-cost, high-yield model with an 82% vessel utilization, the highest in 5 years.

“Excess passage capacity has been converted to carry normal freight and roro cargo, thereby reducing passage capacity and maximizing margins,” ATSC said.

ATSC said it is on solid ground to acquire tonnage to replace lost capacity from the sale of its vessels in 2007. The company said it has internally financed its capital expenditure of P409.6 million, which was mainly for a vessel purchase and the maintenance of operating assets.

“Moving forward, ATS will keep working on ways to increase margins. Although it continues to face challenges in rising fuel prices, its balance sheet and cash flows remain strong. Efforts will remain focused towards reducing or eliminating additional costs and on improving operating efficiencies in every area of the enterprise,” ATSC said.