Essar Shipping Q4 net loss narrows, to sell stake in subsidiary

The company's consolidated net loss narrowed to Rs 151.66 crore from Rs 159.69 crore in the year-ago period

Essar Shipping on Wednesday said its consolidated net loss narrowed to Rs 151.66 crore for the quarter ended March 31, 2016.

The firm had posted a net loss of Rs 159.69 crore in the year-ago period, it said in a regulatory filing.

Total consolidated income of the firm, however rose to Rs 445.62 crore in January-March quarter of the last financial year from Rs 426.51 crore during the same quarter in 2014-15.

The firm indicated that it may have to take an impairment on certain assets related to the Oilfields Services Business.

In the filing, Essar Shipping said, "Goodwill of Rs 6,062.56 crore on consolidation in the financial statements of the Group pertains to the Oilfields Services Business."

The carrying amount of certain rigs (including capital work-in-progress of Rs 79.04 crore), which have generally not been deployed for extended period of time of the said business is Rs 173.03 crore as at March 31, 2016, it added.

"The management is in process of validating various operational assumptions impacting the estimated future cash flows from the operation of the rigs of the said subsidiary and the consequent effect on the valuation of the subsidiary to determine whether there is any decline, other than temporary in the value of the aforesaid investment," it said.

Pending conclusion of the said assessment, recoverable amounts of the goodwill and the rigs, are not yet estimated and accordingly, provision for impairment of the goodwill and the rigs, if any, has not been recognised as at March 31, 2016, it added.

In a separate filing, the company said its board has in-principle approved to sale of upto 51% shares in its subsidiary, Arkay Logistics, subject to approvals.

For entire 2015-16 financial; year, the firm's consolidated net loss was lower at Rs 453.09 crore from Rs 458.95 crore in 2014-15. Total consolidated income declined to Rs 1,719.63 crore against Rs 1,910.62 crore during the same period.