Financial Daily from THE HINDU group of publications
Thursday, Feb 02, 2006
Financial Daily from THE HINDU group of publications Thursday, Feb 02, 2006 |
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Logistics
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Financial Performance Corporate Results - Shipping GE Shipping Q3 net down 35% Our Bureau
Mumbai , Feb. 1 GREAT Eastern Shipping Co Ltd has reported a 35 per cent drop in net profit for the third quarter following higher operating expenses and dry-docking of some vessels. The country's largest private shipping company earned a net profit of Rs 185.21 crore during the three months ended December 2005 as against Rs 287.5 crore in the year-ago period. Mr K.M. Sheth, Executive Chairman, said the bunching of 5-6 vessels for dry-docking had impacted earnings during the quarter. The results would improve in the next quarter, he said. The total income grew 12 per cent year-on-year at Rs 708.6 crore from Rs 633.24 crore. The shipping division contributed around 85 per cent to the operating income and 81 per cent to profit before interest and tax, whereas the offshore division contributed around 12 per cent to the operating income and 11 per cent to profit before interest and tax. For the nine months ended December 31, 2005, profit after tax was Rs 716.08 crore (Rs 557.11 crore), a 28 per cent growth year-on-year. Total income grew 31 per cent at Rs 2,030.17 crore (Rs 1,548.07 crore). The board of directors declared a second interim dividend of Rs 2.50 per share, which would result in an outflow of Rs 54.26 crore (including tax). Along with the first interim dividend of Rs 4 per share declared in October 2005, the total outflow was Rs 141.08 crore (including tax). Tanker rates were sharply higher compared to the previous quarter but were well off the highs seen in the third quarter of FY 2004-05. The company said the more `subdued increase' could be a direct outcome of the net additional fleet supply. Net average tanker earnings during the quarter were 35-40 per cent lower than that in the third quarter of FY 2004-05 but well above historical averages. The dry bulk spot rates continued to remain weak despite strong fundamental demand. The company's older dry bulk fleet was the worst hit and average earnings were "half" that achieved in Q3 FY 2004-05. During the quarter, the company undertook six dry dockings, mainly of older vessels, resulting in increased lay-up expenses as compared to Q3 FY 2004-05. Though the company sold four ships (one medium-range product carrier and three handy-size dry bulk carriers), there was impairment in the value of assets to the extent of Rs 87.55 crore. The court has approved the scheme of arrangement for demerger of the company's offshore business into a separate company, `Great Offshore Ltd.' According to Mr Sheth, as many as 11 different taxes in the country have nullified the benefit of tonnage tax and erased the competitiveness of Indian companies.
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