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Finance- 2Go

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Debbie Go

on 14 March 2013

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Transcript of Finance- 2Go

Finance Final Project

MGT 350

2nd Semester, SY 2012-2013 Go, Debbie Ann

Hermosura, Bryan

Kim, Yeong In Proposal Financial statements
Analysis
Ratios Income Statement Vertical Analysis Horizontal Analysis Price and Positioning: Product: Domestic Cruise Ship Place: Puerto Princessa Proposed Project: Cruise Ship Objective Products/Services/Destination: Ports of Call Objectives
Background
Analysis of Operation The researchers aim to know the following:

1. Financial Status of the company

2. Feasibility of investing in a New Cruise Ship These are located primarily in Bacolod, Batangas, Butuan, Cagayan de Oro, Calapan, Cebu, Coron, Cotabato, Davao, Dipolog, Dumaguete,General Santos, Iligan, Iloilo, Jagna, Manila, Ormoc, Ozamis, PuertoPrincesa, Surigao, Tagbilaran, and Zamboanga. Destination: Puerto Princessa, Palawan 2Go has introduced to us a whole new way to travel.

Premier provider of sea transport to promote domestic tourism and be a domestic cruise that would connect people from Manila to different islands and vice versa.

Refurbished the ships, upgraded all the furniture, provided a very different experience on board -- provided entertainment, restaurant facilities and different activities for people to do on board. Since 2GO promotes luxury, price is expected to be high but still affordable.
The company will ensure that costs will be low in order to lower prices without sacrificing quality.
2GO aims to let their customers feel like they are on vacation before even getting to their destination. Ramos, Mikee

Señires, Denise Brand Profile: 2GO Travel is one of the largest, premier land/sea-travel providers in the Philippines.

The company offers a wide selection of hotel accommodations/services, tours and events packages, with the ease of land/sea travel.

Born out of established brands such as Negros Navigation, Superferry, Cebu Ferries, and Supercat, 2GO Travel has a combined history of more than 148 years in travel industry.

The company aims to redefine travel.
( http://travel.2go.com.ph) Mission, Vission, Culture •Mission: 2GO Travel bridges people and places wherever, whenever, seamlessly.

• Vision 2020: 2GO Travel is the premier provider of unique travel experience that brings people together beyond expectations. CULTURE

1. Corporate Governance - Commits to corporate values and accepted ethical and

moral rules and norms that apply inside and outside the organization.

2. Integrity and Transparency - Doing the right things for the right reasons. Treating people fairly and with respect.

3. Teamwork - The ability to work in unison to achieve a common goal.

4. Our People - Our people are the central movers of the organization.

5. Innovation - Process by which new ideas for continuous improvement and

breakthroughs toward organizational effectiveness and efficiency are promoted and

institutionalized.

6. Excellence - A talent or quality which is unusually good and surpasses ordinary

standards. It is also aimed for standard of performance.

(http://travel.2go.com.ph_) Vessel Fleet As of December 31, 2011, 2GO and its subsidiaries have a total fleet of 29 operating vessels, of which 19 are company-owned ships.

The fleet consists of 8 fast crafts, 12 RoRo/Pax vessels (of which 3 vessels are time chartered from its parent company, NENACO), and 9 freighters (of which 3 are also time chartered from NENACO and 4 from MCCP). Market Share As of December 31, 2011, 2GO continues to dominate the Philippine Sea Travel with 93% market share in thepassage service, specifically in ports that they serve. Freight market share is estimated at 33%. Market Information As of date, April 30, 2012, the market price of the Company’s common stock is P2.08/share Expenses Materials, parts and supplies are obtained mostly from local suppliers at competitive rates. Fuel and lubes, the biggest operating expense of the Company is purchased from a major fuel provider.

(http://travel.2go.com.ph/Destinations/PDF/2GO-Travel-Destination-Boracay.pdf) S.W.O.T. Demographics In 2010, around 3.5 million tourists or 1.8 percent of the total number of international tourists in Asia and the Pacific visited the Philippines, making us the 14th most visited country out of 25 countries in the region. Continuation of Demographics With the Puerto Princesa Underground River making it to the New 7 Wonders of Nature; we wouldn't be surprised if Puerto Princesa will jump significantly in the rankings for 2012.

(http://www.nscb.gov.ph/sexystats/2012/SS20120606_tourism.asp) Puerto Princessa River had been drawing about 160,000 tourists.
Last year, the number of visitor balooned to 425,000
425,000. Recently, the 8.2-kilometer underground river was finally recognized as one of the new wonders of nature. With the confirmation, political and tourism authorities expect 550,000 visitors.
From only two flights daily using small planes in the past, over a dozen flights of jumbo planes daily now land in Puerto Princesa.

(http://www.sunstar.com.ph/cagayan-de-oro/opinion/2012/02/10/wenceslao-choice-has-be-made-now-205423) Promotions: To drive passenger volume and sales, the Company offered various signature price promotions such as the “Crazy Tawad Fares”, the “year-round low price regular fare offering” and “Todo Todo Sale Sail”, a special promo with defined selling and sailing dates.

2GO Travel sells tickets using four distribution channels: (1) over 1,200 online outlets nationwide composed of company-owned corporate outlets, and third party outlets and network agencies, (2) an in-house call center; (3) through the 2GO Travel website; and (4)on-line third party-operated marketing websites (i.e. ensogo.com) for xtremely discounted package fares during the lean season. Balance Sheet Assets Ratios Liabilities income statement ratio Balance Sheet Ratio Capital Budgeting Sources of Funds
The company will shoulder all the expenses in making the cruise ship. The capital budget only comprises 2% of the company’s equity so there is no need to borrow from the bank or other firms.

Depreciation and Schedule
The cruise ship will be depreciated for 50 years, straight-line method, and furnishing of the ship will be depreciated for 10 years.
The project will start on July 2012 and will end by December of the same year Free Cash Flow Forecasting Net Present Value Php 53,635,475.22
Cost of Capital 2%
IRR 13%
Payback Period 5 years, 3 months Projection The End! :) OPEX Total sqm touched= 314sqm CAPEX
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