Essar Shipping Limited (ESL)
recorded an increase in its net profit at Rs. 30.28 crore
(USD 6.50 million) for the quarter ended June 30, 2003
compared to Rs. 3.31 crore (USD 0.68 million) for the corresponding
period in the previous year. The net profit was after providing
a book loss on sale of a vessel and dry-docking aggregating
to Rs. 25.32 crore. ESL has achieved an EBITDA margin of
53.20% for the quarter ended June 30, 2003 as against 49.30%
in the corresponding period of the previous year .The EBITDA
was Rs. 59.07 crore (USD 12.68 million) compared to Rs.
39.14 crore (USD 7.98 million), representing an increase
of 50.91%.
Total income was Rs. 151.64 crore (USD 32.55
million) compared to Rs. 97.02 crore (USD 19.79 million)
for the corresponding period of the previous year, representing
an increase of 56.3%. Fleet operations & charter
revenues (TCE Basis) have been higher at Rs.122.52 crore
(USD 26.29 million) compared to Rs. 72.28 crore (USD
14.74 million) in the corresponding period last year.
Interest and Depreciation
were Rs. 12.22 crore (USD 2.62 million) and Rs. 17.17 crore
(USD 3.67 million) respectively, for the quarter ended
June 30, 2003. Provision of tax net of deferred tax asset
resulted in a net credit of Rs. 0.60 crore (USD 0.13 million).
During the corresponding period of the previous year, interest,
depreciation and taxes (net) were Rs. 18.4 crore (USD 3.75
million), Rs. 17.47 crore (USD 3.58 million) and Rs. 0.04
crore (USD 0.01 million) respectively.
The above results
were taken on record at the meeting of the Board of Directors
held on 18th July 2003.
Markets
The start of the quarter saw freight rates for Suezmax
Tankers plunge because of shortage of cargo due to strikes
and social unrest in Nigeria. Freight rates came down from
the levels of US$ 45,000 per day to US$ 25,000 per day.
However, increased supply from WAFR and the resumption
of the Iraqi oil supply, the supply of cargo increased,
improving freight markets to the levels of US$ 34,000 by
the end of May 2003. May saw an increased level of activity
in the Mediterranean, which took the rates to the levels
of US$ 42,000 per day. The last month of the quarter saw
a seasonal reduced amount of overall activity, which put
a downward pressure on the freight rates to a level of
WS 90 in WAFR.
Overall the Capesize markets were quite firm
during the quarter though the brokers are now suggesting
a "soft
landing" of the Capesize Market. The one-year TCE
rates for 1980's built Capesize vessels remained around
USD 13,000 per day during the period. The smaller dry
bulk market showed lesser amount of volatility and remained
steady almost throughout the quarter with the high level
of activity. Most iron ore loading facilities were having
congestion problems because which had an impact on the
availability of tonnage. The handysize market averaged
at USD 6,900 per day and the handymax market averaged
at USD 9,100 during the quarter.
Outlook
The potential resumption
of Iraqi exports via Ceyhan and a recent opening of an
offshore transshipment facility capable of handling vessels
of upto 150,000 dwt at Murmansk (Baltic Sea) can help firm
up freight rates for tankers in the near future. Overall
the markets are expected to remain soft till the end of
the July-September quarter and start firming up once the
demand for oil starts picking up with the onset of winter.
With
China emerging as a major driver for industrial bulk and
steel demand and the rebuilding of Iraq, the outlook for
the dry bulk sector remains firm. However, US Department
of Agriculture's, forecast 3.9% contraction in world wheat
/coarse grain trade might put a downward pressure on the
handymax / handysize freight rates.
The Ministry of Disinvestment,
Government of India, has intimated ESL of its being shortlisted
for making a bid for Shipping Corporation of India Ltd.
(SCI). ESL has interest in acquisition of SCI in light
of the geographical market share and asset synergies. As
per the current schedule the financial bids are likely
to be invited in mid-October 2003.
Key Financial Highlights
for the quarter ended June 30,2003
Fleet Operating & Chartering
earnings increased to Rs. 151.64 crore (USD 32.55 million)
as against Rs.97.02 (USD 19.79 million) in the corresponding
quarter in the previous year, translating into a 56.29%
growth.
Cash Profit of Rs 47.45
crore (USD 10.18 million), as against Rs. 20.74 crore
(USD 4.23 million) for the corresponding quarter in
the previous year, an increase of 128.78%.
EBITDA at Rs 59.07 crore (USD 12.68
million) as against Rs. 39.14 crore (USD 7.98 million)
during the previous year, translating into a 50.91%
growth.
EBITDA margin of 53.20% as against
49.30% in the last corresponding period last year.
Net Profit after Tax at Rs 30.28
crore (USD 6.50 million) as against Rs 3.31 crore (USD
0.68 million) for the corresponding period of the previous
year.
EPS (annualized)
As
at June 2003
As
at June 2002
Rs. 4.01
Rs. 0.62
Fleet
As on July 18, 2003 the
Essar fleet consisted of 32 vessels as follows:
Type
Number
DWT
Suezmax Carriers
6
919,080
Product Tankers
3
45,824
Dry cargo bulk carriers
5
354,777
Mini-bulk carriers
11
24,200
OSVs
3
5,253
Tugs
4
1,600
Total
32
1,350,734
During the quarter, the company sold one
handymax bulk carrier "Nand Neeti."
Quarter
Ended
(Rs crore)
Quarter
Ended
(USD million)
30th June 2003
30th June 2002
30th June 2003
30th June 2002
Income
from operations
Fleet Operating & Chartering
earnings
151.64
97.02
32.55
19.79
Profit (Loss)on sale of Shipping
Assets
(11.85)
5.7
(2.54)
1.16
Other Income
0.36
1.4
0.08
0.29
Total Income
140.15
104.12
30.08
21.24
Operating
Expenses
Fleet Operating Expenses
62.55
49.40
13.43
10.08
General & Administrative
Expenses
5.06
6.45
1.09
1.32
Lease rentals
-
6.96
-
1.42
Dry Docking Expenses
13.47
2.18
2.89
0.44
Total Operating Expenses
81.08
64.99
17.40
13.26
EBITDA
59.07
39.13
12.68
7.98
EBITDA Margin
53.20%
49.29%
Depreciation
17.17
17.46
3.69
3.56
Net Interest expense
12.22
18.40
2.62
3.75
Income before tax
29.68
3.27
6.37
0.67
Provision for Taxation
(0.60)
(0.04)
(0.13)
(0.01)
Net Profit after
Tax
30.28
3.31
6.50
0.68
For 2003 figures, 1 USD
= Rs.46.59
For 2002 figures, 1USD = Rs.49.03
For more information
on the Earnings Report or on Essar Shipping Limited contact:
Essar Group
Corporate Communications corporatecommunications@essar.com
Tel : 91-22- 2495-0606 / 6660-1100
Note:
This earning release contains forward
looking statements regarding prospects for the Company's
business, including outlook for the markets. Investors
should make their investment judgements based on their
own analysis. This earnings release is for information
only and must not be construed as an invitation to acquire
the shares of the Company.
CORPORATE
