Note: These are the first results being reported by Essar Shipping Ltd. (ESL) subsequent to the successful demerger of Essar Shipping Port & Logistics Ltd (ESPLL) into Essar Ports Ltd and Essar Shipping Ltd. While the erstwhile ESPLL has been renamed as Essar Ports Ltd, the Sea Transportation, Oilfield Services and Logistics businesses have been demerged to form Essar Shipping Ltd (ESL).
Mumbai : ESL reported its first quarterly results pursuant to the demerger of the erstwhile Essar Shipping Ports & Logistics Ltd (ESPLL). The company reported a strong performance despite challenging markets.
ESL registered improved operational performance in Q1FY2012 compared to the corresponding period in the previous year. The revenues excluding other income for Q1FY2012 stood at Rs 657.07 crore as compared to Rs 635.47 crore for the corresponding period in the previous year, an increase of 3.4%. The company registered total revenue of Rs 670.19 crore in Q1FY2012 as compared to Rs 723.59 crore for the corresponding period in the previous year. The EBITDA for Q1FY2012 stood at Rs 175.99 crore as compared to Rs 216.12 crore for the corresponding period in the previous year. The dip in EBITDA when compared with Q1FY2011 can be attributed to other income earned to the tune of Rs 88.02 crore in Q1FY2011.
The Sea Transportation business registered revenue of Rs 294.48 crore in Q1FY2012 as compared to Rs 354.83 crore, including other income of Rs 82.75 crore, for the corresponding period in the previous year. The EBITDA for Q1FY2012 stood at Rs 116.21 crore as compared to Rs 116.30 crore in Q1FY2011. The Sea Transportation business witnessed improved operational performance in Q1FY2012; the EBITDA excluding other income for Q1FY2012 stood at Rs 116.21 crore as compared to Rs 86.15 crore for the corresponding period in the previous year, an increase of 34.9%.
The freight markets were challenging, the Baltic index has fallen by more than 42% when compared with the same period in the previous year. Such strong performance, despite tough market conditions, is primarily because of the company’s strategy to enter into long term charter of the vessels which provides a natural hedge against the cyclical nature of the industry and ensures long term visibility of revenues and profitability.
Oilfield Services’ revenues grew by 26.5% to Rs 90.16 crore as compared to Rs 71.25 crore for the corresponding period in the previous year. The EBITDA for Oilfield services increased by 38.3% and stood at Rs 42.85 crore as compared to Rs 30.98 crore for the corresponding period in the previous years. The Logistics business registered revenue of Rs 285.56 crore for Q1FY2012 as compared to Rs 297.41 crore for corresponding period in the previous year. The EBITDA for Q1FY2012 stood at Rs 16.94 crore as compared to Rs 16.24 crore for the corresponding period in the previous year, an increase of 4.3%.
Speaking on the results, AR Ramakrishnan, Managing Director, Essar Shipping Limited, said, “The overall results for the current quarter are in line with our expectations. Sea Transportation business performed well in spite of challenging freight markets. The Oilfield Services business had a higher asset utilization rate resulting in higher revenues and EBITDA.
The above results were taken on record at the meeting of the Board of Directors of the company held on 9th August 2011.
Key highlights of the quarter are as follows:
Sea Transportation Business:
- MV Chandi Prasad, Capesize dry Bulk carrier of 152,065 DWT has joined the fleet in July, 2011.
- Have entered into 15-year long term contract with Essar Steel Limited for transportation of iron-ore along the Indian coast
- Essar Wildcat won an 18 month contract with ConocoPhillips, and will be deployed in Indonesia starting from September, 2011.
- Essar Wildcat successfully completed 1,000 days of LTI-free operations
- Accredited to ISO 9001:2008 certification in July 2011
About Essar Shipping Limited
Essar Shipping Limited’s operations comprise Sea Transportation, Oilfield Services and Logistics businesses. The sea transportation business provides crude oil and dry bulk transportation services to leading Indian and global oil majors, core sector industries and commodity traders. It has a diversified fleet of 26 vessels including 2 VLCCs, 6 Capesize, 2 Supramax, 2 Handymax bulk carriers, and Mini-Bulk carriers. The company has on order 12 new ships – 6 Minicapes and 6 Supramax dry Bulk carriers – which are expected to join the fleet in a phased manner by FY 2013.
The Oilfields Services business provides contract drilling and related services to oil & gas companies worldwide, operating both offshore and onshore. It owns a fleet of 13 rigs, comprising 1 Semi-Submersible rig and 12 onshore rigs. The company has on order 2 new jack-up rigs that are expected to be delivered during FY 2013.
The Logistics business provides end-to-end inter-modal logistics services from ships to ports, lighterage services, intra-plant logistics, and dispatching finished products to the final customer. It manages a fleet of 5,000 trucks for inland transportation of steel and petroleum products and has a strong presence across road, rail and costal sea movements.
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