Essar Shipping Q1 profit down 64% to Rs 19 cr

Firm reported net profit of Rs 53.90 crore during the corresponding quarter of the previous fiscal

Essar Shipping today reported a decline of nearly 64% in consolidated net profit at Rs 19.41 crore for the April-June quarter, largely due to over 48% fall in its total income.

The Ruias-promoted firm had reported a net profit of Rs 53.90 crore during the corresponding quarter of the previous fiscal.

Its total income from operations was down 48.44% to Rs 472.25 crore during the quarter as its various businesses reported fall in income. Essar's total income from operations in the comparable period was Rs 915.84 crore.

While income from logistics services business was down over 96% to Rs 10.87 crore, fleet operating and chartering business reported a decline of 35.42% at Rs 298.71 crore in the quarter.

Oilfield services business of the company reported a muted growth of 3.15% to Rs 173.46 crore during the quarter.

"The reduction in revenue was mainly due to scale down of logistics services done through Essar Logistics Limited (ELL). This was in line with the plan of Essar Shipping Limited to focus on its core high EBITDA margin business activities viz. sea transportation and oilfields services," company's Managing Director A R Ramakrishnan said in a statement.

The company said its EBITDA (earnings before interest, taxes, depreciation and amortisation) margin on a consolidated basis has increased to 44% during the April-June quarter as compared to 27% in the corresponding quarter of previous year.

The Essar group company also announced changes in its Board as it appointed three industry leaders, Michael Pinto, Capt B S Kumar and N C Singhal as independent directors.

Pinto is former Shipping Secretary and former Chairman of Jawaharlal Nehru Port Trust, while Capt B S Kumar has several decades of experience in the maritime industry both domestic and international, the company said.

N C Singhal is the founder of the erstwhile Shipping Credit and Investment Company of India Ltd (SCICI).

"The board now has an ideal mix of competencies in the fields of maritime industry, governance, finance, strategy and risk management that will add substantial value and give a new direction to the Company," Essar said.

Shares of the company rose 2.19% to close at Rs 14 apiece on the BSE today.