GE Shipping net up 51% to Rs 235 crore

BS 200 Scorecard

Great Eastern Shipping Company, the country's largest private shipping company, buoyed by increased tanker earnings and higher profits from inchartered tonnage recorded 50.88 per cent growth in net profit to Rs 235.48 crore for the quarter ended September 30, 2006. Income from operations grew 25.90 per cent to Rs 593.20 crore.

The gain on sale of ships for the quarter stood at Rs 38.81 crore against Rs 34.58 crore for the quarter ended September 30, 2005.

"We are evaluating opportunities for selling and buying ships. We may sell a few more ships," said Bharat Sheth, deputy chairman and managing director. The company has inchartered five ships, two for the dry bulk segment and three for the tanker segment. "The company will examine more inchartering opportunities if the risk-reward ratio is favourable," Sheth said.

The growth in net profit was mainly owing to higher tanker freight rates, increased profits from inchartered tonnage and lower dry docking and repair costs. "Improved tanker earnings were a result of renewals for term contracts at improved rates as well as higher spot fixtures.

The average earnings on dry bulk vessels were more or less in line with the corresponding quarter last year," said Balan Wasudeo, the company's chief financial officer. The company said crude tanker freight rates were expected to soften owing to OPEC's decision to curb production, the slowdown in the US and the probable mild winter coupled with comfortable inventory of heating oil in the US.

Product tankers are expected to continue to remain relatively weak, while dry bulk market on the contrary is expected to be firm, based on sustained growth in China.

The company has declared an interim dividend of RS 4 a share on the reduced equity share capital (post demerger of the offshore business) which would result in an outflow of Rs 69.45 crore including the tax on dividend.

Following the demerger of its offshore business into a separate entity, GE Shipping is now mainly engaged in shipping. Effective October 16, the company has demerged its offshore services business into a new company called Great Offshore Ltd.

For the quarter, revenue days at 3744 were lower by around four per cent against corresponding quarter of previous year (at 3896 days), while owned tonnage stood at 2.77 million dead weight tonne (DWT) decreased by 6.41 per cent.