Ethiopian Shipping Lines net up to Br 417m
The Ethiopian Shipping Lines (ESL) has netted a 417 million Br profit during the just ended budget year, exceeding its target by 68pc. Compared to its earnings in the previous year, it is 40pc higher.
The total revenue the carrier planned for during the budget year was 2.3 billion Br. However, the carrier gained 2.5 billion Br, a 33pc mark up from the previous year’s achievement. This translated into a higher profit because the rate at which the expenditure of the company increased is much lower.
Its 2.1 billion Br annual expenditure grew by only a single percentage point from what it has targeted.
Not only its revenue and profit has dramatically increased. The volume of cargo it has transported has also shot 10pc past the 1.87 million tonnes target.
This exceeds the volume it transported the previous year by 26pc.
If the cross trade shipment, which pushes the annual shipment up to 2.2 million tonnes is included, the volume exceeds the previous year’s amount by 50pc and the annual target by 29pc. The cross trading sector, which the carrier embarked upon after securing bulk certification last year, transported 353,429tn, which is about 1,767pc more than the expected 20,000tn.
“This unexpected rise in cross trade is attributable to the Bulk Certification that we acquired during the previous budget year,” said Ambachew Abreha, managing director, of the company at the annual performance report discussion held at the shipping line’s hall on August 12, 2008. “We entered the bulk shipment arena after the certification. So it rose much more than we expected and it has contributed a huge deal towards the total annual shipment volume.”
ESL gained the Bulk Certification from Det Norske Veritas (DNV), a world leader in certification services. The certification is an international recognition endorsing carriers for their capacity to enter the bulk shipment business.
It is only after ESL bought bulk certified vessels, Shebelle and Gibe, each with a shipment capacity of 27,100tn and upgraded its old vessels that the company acquired the certification. Cross trading alone, according to the managing director, has earned the country over 25 million dollars in foreign currency. The certification is in addition to the Tanker Operator and Dry Cargo Operator certificates which the shipping line already has.
The annual share of ESL in the country’s import/export volume during the budget year is 49.6pc (excluding petroleum), while the total import shipping share alone is 65.4pc.
According to Eyasu Yimam, Planning and Research Department manager, the carrier has utilized 90pc of its available ship resources to attain this achievement.
The carrier’s shipment from North Western Europe is 35pc more than that planned, and 52pc more than the previous year ,while the carrier achieved 97pc of its target from the Far East, which is still 19pc more than the previous year’s shipment from the area.
The services rendered from the Gulf lines is 29pc above the target and exceeds that of the previous year by 39pc, while the same service from India was 121pc more than the targeted shipment and 146pc more than that of the previous year.
Various forms of iron and steel products make up a dominant share, that is, 450,000tn of the imported goods. The majority of this figure, 359,000tn comes from the Black Sea countries, Ukraine and Turkey, over twice the amount the carrier shipped in from the same countries in the previous budget year, which was 159,000tn.
Ambachew mentioned some of the internal and external challenges that impeded the carrier from attaining more.
“Despite the procurement of ships and upgrading of the old ones, the carrier remains unable to conduct all its shipments via its own vessels,” he said.
A yearly report shows that ESL transported 63pc of the total shipment by chartered ships and slot shipping mechanisms, while the remaining 37pc was transported using the carrier’s nine vessels.
Ambachew said that this was because they did not have an adequate number of ships, and using worn-out vessels had high technical costs. He said that there are ships which have been used for more than 24 years running.
On external challenges, the managing director said that a high level staff turnover had greatly disadvantaged the carrier. ESL officers, whom he said have international licenses, had joined other international carriers, which offered better remuneration.
In a bid to stop this loss of professional manpower, the shipping line doubled the salary of its workers in March 2008, but this has had little impact on the staff turnover. Fortune learned from reliable sources that in the just ended fiscal year alone, 12 officers had left the carrier. Ambachew said that there is a global shortage of officers and ESL’s challenge is no exception.
Despite being delighted with the astronomical growth in revenue, the employees, however, had one pertinent request.
Genet Ayele, Customers Service Division head, called for a fat bonus equivalent to two months’ salary as an incentive since, according to her, the achievement is largely a result of the workers’ tireless efforts. She underlined the fact that the bonus should be calculated based on the recently introduced salary scale. Addressing the plea, the managing director said that the bonus would be granted, although he could not guarantee that it would be calculated based on the new salary scale.
The shipping line currently has 204 office workers, 393 sea-going ones, and 30 contractual workers.
Ethiopian Shipping Lines S.C. was founded in 1964 and started operations in 1966 with three newly-built ships (two general cargoes and one tanker).
It was established as a share company with a capital of 50,000 Br, subsequently raised to 3.7 million Br after Taurus Investment Inc. of Washington DC agreed to subscribe to 51pc of the capital requirements, and designated two directors for the company. The Ethiopian government underwrote the remaining 49pc of the capital required, and also designated two directors of the company. Eventually, the American company sold its share to the government of Ethiopia, and the company has been wholly owned by the government since 1969.
The total revenue the carrier planned for during the budget year was 2.3 billion Br. However, the carrier gained 2.5 billion Br, a 33pc mark up from the previous year’s achievement. This translated into a higher profit because the rate at which the expenditure of the company increased is much lower.
Its 2.1 billion Br annual expenditure grew by only a single percentage point from what it has targeted.
Not only its revenue and profit has dramatically increased. The volume of cargo it has transported has also shot 10pc past the 1.87 million tonnes target.
This exceeds the volume it transported the previous year by 26pc.
If the cross trade shipment, which pushes the annual shipment up to 2.2 million tonnes is included, the volume exceeds the previous year’s amount by 50pc and the annual target by 29pc. The cross trading sector, which the carrier embarked upon after securing bulk certification last year, transported 353,429tn, which is about 1,767pc more than the expected 20,000tn.
“This unexpected rise in cross trade is attributable to the Bulk Certification that we acquired during the previous budget year,” said Ambachew Abreha, managing director, of the company at the annual performance report discussion held at the shipping line’s hall on August 12, 2008. “We entered the bulk shipment arena after the certification. So it rose much more than we expected and it has contributed a huge deal towards the total annual shipment volume.”
ESL gained the Bulk Certification from Det Norske Veritas (DNV), a world leader in certification services. The certification is an international recognition endorsing carriers for their capacity to enter the bulk shipment business.
It is only after ESL bought bulk certified vessels, Shebelle and Gibe, each with a shipment capacity of 27,100tn and upgraded its old vessels that the company acquired the certification. Cross trading alone, according to the managing director, has earned the country over 25 million dollars in foreign currency. The certification is in addition to the Tanker Operator and Dry Cargo Operator certificates which the shipping line already has.
The annual share of ESL in the country’s import/export volume during the budget year is 49.6pc (excluding petroleum), while the total import shipping share alone is 65.4pc.
According to Eyasu Yimam, Planning and Research Department manager, the carrier has utilized 90pc of its available ship resources to attain this achievement.
The carrier’s shipment from North Western Europe is 35pc more than that planned, and 52pc more than the previous year ,while the carrier achieved 97pc of its target from the Far East, which is still 19pc more than the previous year’s shipment from the area.
The services rendered from the Gulf lines is 29pc above the target and exceeds that of the previous year by 39pc, while the same service from India was 121pc more than the targeted shipment and 146pc more than that of the previous year.
Various forms of iron and steel products make up a dominant share, that is, 450,000tn of the imported goods. The majority of this figure, 359,000tn comes from the Black Sea countries, Ukraine and Turkey, over twice the amount the carrier shipped in from the same countries in the previous budget year, which was 159,000tn.
Ambachew mentioned some of the internal and external challenges that impeded the carrier from attaining more.
“Despite the procurement of ships and upgrading of the old ones, the carrier remains unable to conduct all its shipments via its own vessels,” he said.
A yearly report shows that ESL transported 63pc of the total shipment by chartered ships and slot shipping mechanisms, while the remaining 37pc was transported using the carrier’s nine vessels.
Ambachew said that this was because they did not have an adequate number of ships, and using worn-out vessels had high technical costs. He said that there are ships which have been used for more than 24 years running.
On external challenges, the managing director said that a high level staff turnover had greatly disadvantaged the carrier. ESL officers, whom he said have international licenses, had joined other international carriers, which offered better remuneration.
In a bid to stop this loss of professional manpower, the shipping line doubled the salary of its workers in March 2008, but this has had little impact on the staff turnover. Fortune learned from reliable sources that in the just ended fiscal year alone, 12 officers had left the carrier. Ambachew said that there is a global shortage of officers and ESL’s challenge is no exception.
Despite being delighted with the astronomical growth in revenue, the employees, however, had one pertinent request.
Genet Ayele, Customers Service Division head, called for a fat bonus equivalent to two months’ salary as an incentive since, according to her, the achievement is largely a result of the workers’ tireless efforts. She underlined the fact that the bonus should be calculated based on the recently introduced salary scale. Addressing the plea, the managing director said that the bonus would be granted, although he could not guarantee that it would be calculated based on the new salary scale.
The shipping line currently has 204 office workers, 393 sea-going ones, and 30 contractual workers.
Ethiopian Shipping Lines S.C. was founded in 1964 and started operations in 1966 with three newly-built ships (two general cargoes and one tanker).
It was established as a share company with a capital of 50,000 Br, subsequently raised to 3.7 million Br after Taurus Investment Inc. of Washington DC agreed to subscribe to 51pc of the capital requirements, and designated two directors for the company. The Ethiopian government underwrote the remaining 49pc of the capital required, and also designated two directors of the company. Eventually, the American company sold its share to the government of Ethiopia, and the company has been wholly owned by the government since 1969.