Philippine domestic trade shipping capacity expands, Aznar cargo business grows strongly

Aznar Shipping's net profit in the first half of the year increased by 155% year-on-year to 53.19 million pesos. The addition of ro-ro ships increased the capacity of Cebu to Leyte and Negros routes, showing that cargo demand in the Philippine Islands is still resilient.

Aznar Shipping Corp. (ASC), a local shipping company in Cebu, Philippines, announced that its net profit in the first half of 2026 reached 53.19 million pesos, an increase of 155% from 20.85 million pesos in the same period last year. During the same period, the company's revenue increased from 100.59 million pesos to 210.99 million pesos, an increase of 110%; earnings before interest, taxes, depreciation, and amortization (EBITDA) also increased from 52.41 million pesos to 103.12 million pesos, an increase of 97%. The company stated that the improvement in performance mainly came from the addition of new ship capacity and the simultaneous increase in freight and passenger volumes.

For the Philippine domestic trade logistics market, the most noteworthy thing is the dominant position of freight in the revenue structure of ASC. RoRo cargo and vehicle transportation accounted for approximately 86% of the company's total revenue in the first half of 2026, with passenger transportation accounting for approximately 14%. This ro-ro passenger ship model allows the same voyage to carry passengers, cars, trucks and other ro-ro cargo at the same time, so it can connect the island market and spread the risks caused by single business fluctuations.

ASC regards new ship investment as the core of this round of growth. MV Manoling 6 mainly serves the route from Cebu to Negros Occidental, while MV Alexander 1 connects Cebu and Leyte. The new ships have expanded route coverage and frequency capacity, allowing the company to accept more cargo and passengers. Company CEO Kyle Alexander Aznar said the additional capacity helps the company improve service frequency and reliability and reflects the ongoing demand for the movement of goods, vehicles and people between the Visayas.

ASC's business focus is short-distance, high-frequency inter-island shipping. The company currently operates 9 ships covering 4 major routes and regularly calls at 8 ports in the Visayas region. Its network connects markets such as Cebu, Leyte, Panay and Negros Occidental, with vessel deployment adjusted based on port infrastructure, route economics and regional demand. For a market like the Philippines, which is composed of many islands, short-distance shipping not only performs traditional passenger transportation functions, but also provides important regional transportation channels for agricultural products, consumer goods, vehicles and industrial supplies.

The company will also start leasing four ships with ro-ro passenger ship capabilities to shipping-related companies on a bareboat lease basis in July 2026. The arrangement adds a supplementary revenue stream to ASC while improving fleet utilization. Compared with directly expanding self-operated routes, chartering business can provide a more flexible asset allocation method when market demand changes, but its long-term effect still depends on the charter contract, ship maintenance costs and the actual performance of the associated routes.

ASC said the company has more than 100 regular customers, and no single customer accounts for more than 10% of freight revenue. The customer structure is relatively dispersed, which helps reduce dependence on a single cargo owner or industry. For freight companies, this structure can provide a certain revenue buffer when market fluctuations, route adjustments, or changes in individual customer orders occur. However, diversifying customers does not mean that companies can ignore cost pressures. Fuel, port operations, ship maintenance and crew costs will still directly affect profit margins.

From an industry level, the expansion of ASC shows that there is still room for growth in inter-island trade and ro-ro transport in the Visayas region. Visayas ports will account for about 35% of the Philippines' national cargo throughput, 60% of passenger traffic and 49% of ro-ro vehicle traffic between 2022 and 2025, the company said, citing research. The company also noted that it expects RoRo shipment growth in Visayas may reach 12.90% by 2028, higher than the national forecast of 10.7%. These data indicate that high-frequency connections between regional ports, the freight-carrying capacity of secondary ports, and cross-island transportation of vehicles are likely to continue to become important components of the domestic logistics network.

ASC plans to promote an initial public offering (IPO) in December, intending to issue up to 1 billion new shares and set up a secondary offering over-allotment option of up to 100 million shares. The upper limit of the issuance price is 0.67 pesos per share. The details still need to go through price inquiry and regulatory approval. The company plans to use the funds raised to support the expansion of its fleet and routes, and to build its own shipyard after the ship size reaches a certain level. In the next three to five years, the company also plans to add three ro-ro ferries that comply with the standards of the International Association of Classification Societies.

For cargo owners, freight forwarders and cross-border logistics companies, the significance of this news is not the profit growth of a single company per se, but that the Philippines' domestic branch lines and inter-island transportation capabilities are receiving more capital and ship resource support. If the new capacity can be put into operation stably, the frequency density, vehicle transportation options and regional distribution stability between major ports in Visayas are expected to improve. However, route expansion still needs to simultaneously consider port congestion, loading and unloading efficiency, weather effects, return cargo sources and compliance costs. Overall, Aznar Shipping's performance and expansion plans reflect that the Philippine freight market still has development opportunities in terms of regionalization, ro-ro and high-frequency inter-island connections.

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