It gives me an immense pleasure to present to you my thoughts for the 29th AnnualReport of Shreyas Shipping and Logistics Ltd. Thank you for taking the time to read thisreport and for your enduring interest and investment in SSL. The year that went bywitnessed another year of sustained growth and strong results. I would like to take youthrough my industry perspectives and our performance.
It has been eight years since the global economy started recouping the huge changes andchallenges brought around by the infamous financial market crash in 2008. The resultantissues have left many large economies in 'recovery' mode'.
The global container shipping continued to face challenging times marked with low oceanfreights. This was owing to a mismatch in demand and supply of vessels coupled withhigher fuelcosts and excess tonnage. Nevertheless market conditions started to show someimprovement in 2016. This was a result of lower-than- demand growth of the fleet - thefirst time since 2010. However much capacity discipline is still needed to support andlift freight rates in 2017.
In India the export-import (EXIM) trade volume has been increasing at a higher ratethan the GDP. This has driven growth in the container traffic as shippers areincreasingly digressing from generalor bulk shipping to container transport. Now picturethis about 22% of general cargo is containerised in India as compared to China's (65%)and the developed nations (80%). A huge gap between containerised and generalcargo isstill clearly visible in India. Hence India continues to be one of the bright spots inthe global EXIM trade of containerised trade.
During 2016-17 India handled a record 647.43 MT of traffic across its 12 major ports(under Ministry of Shipping) registering an annualgrowth rate of 6.79% as against 4.32%last year. This Improvement of performance was the result of many measures initiated bythe Ministry of Shipping to improve the performance of the ports. These include:mechanisation of the terminals improving the TAT (turn-around time) guick evacuation ofcargo expansion of infrastructure and skill development of employees. Going forward theimplementation of GST will aid in the ease of cargo movement across India. Thusproviding significant cost efficiencies to various industries supply chains and changethe warehousing landscape.
Our consolidated topline improved by 21.04 % over the previous year. We achievedtotalrevenue of Rs. 727.07 crores as against Rs. 600.69 crores in the previous year. OurEBIDTA margins strengthened to 10.06% and PAT to 4.60%. The performance was driven by ourfocus on rationalisation of tonnage and services to achieve better asset utilisation andreduction in operating cost.
Partnership with SCI
We are highly optimistic about our partnership with SCI. We are confidenffhatthisjointvenfurewilltake Coastal Shipping to a greater height and achieve the vision of Governmentof India. We are now covering all the main ports on the Indian Coast. In addition toIndian Ports we are now geared to move cargo right fromjebel Ali upto Yangoon and viceversa.
During the year we acguired two container ships - SSL Delhi (2500 TEUs) and SSLKolkata (1100 TEUs) at a very reasonable price. The acguisitions did not impact ourleveraging capacity and we continue to still maintain a healthy debt eguity of 0.76.
It has strengthened our Indian-registered fleet and increased our connectivity throughhigher tonnage and service freguency for ports all along the Indian coast.
Focus on Krishnapatnam
During the year we strategically changed our ECC feeder service hub from Vizag toKrishnapatnam for a considerable cost advantage. Besides the hub is also a major terminalof transhipment cargos for other shipping lines like Maersk Hyundai and ZIM lines whohave their port chains from Singapore. We expect an additional volume of around 4500 TEUsper month on this sector for the feeder on the ECC service.
Today we are an established player in our own space and have created a strongfoundation for our future growth. Our continued initiatives towards cost rationalisationand efficiency improvement will take us to the next level of growth. We are continuouslystrengthening our IT infrastructure for real-time dissemination of information to ourcustomers. And last but definitely not the least we are constantly harnessing the skillsof our crew and providing them the best work environment to operate in.
In the end I would like to convey my sincere acknowledgements to our preciousinvestors stakeholders partners bankers customers suppliers and all the regulatoryand statutory authorities for their continued faith in our ability. We hope to get yoursupport going ahead and together build an empowering enterprise.
Chairman and Managing Director