GE Shipping Q4 net up 24.25%
The Board of Directors of The Great Eastern Shipping Company Ltd. (G.E. Shipping) today approved the Audited Financial Results for the fourth quarter of FY 2007-08 and the full year ended March 31,2008. The Board has declared a 3rd interim dividend of Rs. 5.00 per equity share. The Company has also declared a one-time special diamond jubilee interim dividend of Rs. 2.50 per share to commemorate its 60th year. Reminiscing on this eventful occasion, Mr.K.M.Sheth, Executive Chairman, said “From its humble beginnings as the owner of a single dry bulk
ship in 1948, Great Eastern has emerged as one of the most respected shipping companies in the world. This year is very special for us not only for being our Diamond Jubilee year, but also for generating the highest profits ever. On a personal note, I have completed 57 years in Great Eastern and am truly thankful for the tremendous support I have received from all employees of the company and other stakeholders over this long period. I can confidently state that our team will strive to sustain and enhance this legacy into the future.”
During the year, an average of 62% of total revenue days were on fixed term employment and the balance 38% on spot employment. The operating profit (PBIDT) for the company was up by 25% on a q-o-q basis and by 48% on a y-o-y basis. This was due to a combination of both higher revenue days, higher TCY’s in the dry bulk segment and increased profit on sale of ships.
In FY08, the number of ships under drydock were 12 as against only 8 ships in FY07. Consequently, the number of lay up days too were higher at 590 days in FY08 as against 248 days in FY07.
During FY 2007-08, the Company took delivery of 4 double hull tankers (2 MR product tankers, 2 Suezmaxes) and 2 dry bulk carriers (1 Handymax, 1 Supramax). The Company entered into new building purchase contracts to buy 8 dry bulk carriers (4 Supramax and 4 Kamsarmax).
During the year, the Company sold several of its old non double hull tankers, (1 VLCC, 2 Aframax & 1 Panamax). The Company has further contracted to sell one more non double hull Panamax product tanker, 2 modern MR tankers and 2 old dry bulk carriers (1 Panamax and 1 Handysize). These are to be delivered between FY09 and FY10.
The Company currently has a total capex commitment of around USD 589 Mn which translates to approx. Rs.2385 crores at current exchange rates. This will result in addition to the tonnage of about 0.85 mn dwt.
The dry bulk market saw a correction in rates as there was some curtailment in iron ore production and cancellation/postponement of stems for shipment. The prolonged price negotiations had a negative impact on the movement for iron ore. Coal shipments too suffered due to floods in Australia and power disruptions in South Africa.
The tanker rates corrected to more normal levels during the quarter, after the extremely sharp spike seen in December. Crude tanker rates remained at healthy levels and the average of the quarter was higher than that of Q4FY07. Product tankers on the other hand softened on the back of the strong build up in US inventories.
Tanker Market :
With the IEA moderately tweaking down their global demand forecast to 87.5 mn bpd, the demand growth for crude oil transportation is likely to remain sluggish in the next few months. However, an acceleration in the conversions to dry bulk is likely to keep supply increases of crude tankers in check leading to a favourable scenario for rates for the crude segment. The outlook for the product tanker segment is a bit weaker due mainly to the large deliveries in 2008.
Dry Bulk Market :
Demand for dry bulk tonnage is likely to remain strong through 2008 aided mainly by growth in the iron ore and coal trades. There is likely to be a major ramp up in production of iron ore in 2008 to keep pace with the Asian demand. Coal trade too remains favourable on the back of mew power plant capacities. A majority of this is likely to be on longer voyages adding to the positive sentiment for the dry bulk vessels.
REVENUE VISIBILITY:
As on May 1, 2008, the revenue visibility is around Rs 890 crores for FY09. Crude and product tankers are covered to the extent of around 43% and 54% of their operating days respectively. In case of dry bulk carriers they are covered to the extent of around 36% of the fleet’s operating days. Gas Carriers are covered to the extent of 100% of their
operating days for the balance part of FY09.
ship in 1948, Great Eastern has emerged as one of the most respected shipping companies in the world. This year is very special for us not only for being our Diamond Jubilee year, but also for generating the highest profits ever. On a personal note, I have completed 57 years in Great Eastern and am truly thankful for the tremendous support I have received from all employees of the company and other stakeholders over this long period. I can confidently state that our team will strive to sustain and enhance this legacy into the future.”
During the year, an average of 62% of total revenue days were on fixed term employment and the balance 38% on spot employment. The operating profit (PBIDT) for the company was up by 25% on a q-o-q basis and by 48% on a y-o-y basis. This was due to a combination of both higher revenue days, higher TCY’s in the dry bulk segment and increased profit on sale of ships.
In FY08, the number of ships under drydock were 12 as against only 8 ships in FY07. Consequently, the number of lay up days too were higher at 590 days in FY08 as against 248 days in FY07.
During FY 2007-08, the Company took delivery of 4 double hull tankers (2 MR product tankers, 2 Suezmaxes) and 2 dry bulk carriers (1 Handymax, 1 Supramax). The Company entered into new building purchase contracts to buy 8 dry bulk carriers (4 Supramax and 4 Kamsarmax).
During the year, the Company sold several of its old non double hull tankers, (1 VLCC, 2 Aframax & 1 Panamax). The Company has further contracted to sell one more non double hull Panamax product tanker, 2 modern MR tankers and 2 old dry bulk carriers (1 Panamax and 1 Handysize). These are to be delivered between FY09 and FY10.
The Company currently has a total capex commitment of around USD 589 Mn which translates to approx. Rs.2385 crores at current exchange rates. This will result in addition to the tonnage of about 0.85 mn dwt.
The dry bulk market saw a correction in rates as there was some curtailment in iron ore production and cancellation/postponement of stems for shipment. The prolonged price negotiations had a negative impact on the movement for iron ore. Coal shipments too suffered due to floods in Australia and power disruptions in South Africa.
The tanker rates corrected to more normal levels during the quarter, after the extremely sharp spike seen in December. Crude tanker rates remained at healthy levels and the average of the quarter was higher than that of Q4FY07. Product tankers on the other hand softened on the back of the strong build up in US inventories.
Tanker Market :
With the IEA moderately tweaking down their global demand forecast to 87.5 mn bpd, the demand growth for crude oil transportation is likely to remain sluggish in the next few months. However, an acceleration in the conversions to dry bulk is likely to keep supply increases of crude tankers in check leading to a favourable scenario for rates for the crude segment. The outlook for the product tanker segment is a bit weaker due mainly to the large deliveries in 2008.
Dry Bulk Market :
Demand for dry bulk tonnage is likely to remain strong through 2008 aided mainly by growth in the iron ore and coal trades. There is likely to be a major ramp up in production of iron ore in 2008 to keep pace with the Asian demand. Coal trade too remains favourable on the back of mew power plant capacities. A majority of this is likely to be on longer voyages adding to the positive sentiment for the dry bulk vessels.
REVENUE VISIBILITY:
As on May 1, 2008, the revenue visibility is around Rs 890 crores for FY09. Crude and product tankers are covered to the extent of around 43% and 54% of their operating days respectively. In case of dry bulk carriers they are covered to the extent of around 36% of the fleet’s operating days. Gas Carriers are covered to the extent of 100% of their
operating days for the balance part of FY09.