The Hindu Business Line : Blue Dart Q2 net rises 24% on service efficiencies

Marketing - Financial Performance
Corporate Results - Supply Chain Management
Web Extras - Outlook
Blue Dart Q2 net rises 24% on service efficiencies

Our Bureau

Mumbai, Aug. 2

Improvement in service efficiencies led Blue Dart Express to post a net profit growth of 24 per cent for the second quarter ended June 30, 2008.

Net profit for the said quarter was Rs 21 crore against Rs 17 crore in the corresponding quarter last year.

"Better integration of information technology helped us to strengthen our products. With IT, we worked towards reducing the cost of inventory through faster turnaround time and reduced cost of monitoring the shipments too," said Mr Yogesh Dhingra, Finance Director and Chief Operating Officer of the company. The total income rose by 31 per cent to Rs 246 crore (Rs 188 crore).

Commenting on how the company has been maintaining profitability despite the high crude oil and aviation turbine fuel (ATF) prices, Mr Dhingra told Business Line that it has been possible through the "transparency in the system of charging fuel surcharge from the customers, and also because there is not much competition in the air freight market leading to better quality service to the clients".

Keeping in line with a further increase of 2.8 per cent in ATF prices announced by the domestic oil marketing companies, Blue Dart also announced a price hike of 10 per cent in domestic air freight services and 15 per cent increase in its ground express products such as Domestic Priority, Dart Apex and Dart Surfaceline.

Blue Dart has a planned capex of Rs 1,000 crore for the next five years to be utilised for strengthening its product base. This will include cash outflow as well as lease rentals paid for its aircraft, said Mr Dhingra. Around Rs 200 crore will be invested every year for the above mentioned period.

The company will also add another aircraft to its fleet by the end of this year, he said.

Blue Dart is also in the process of improving services of its ground express business with `Dart Surfaceline', which was launched last year. "The aim is to take the current market share of six per cent to 20 per cent next year," he said.

Currently, Dart Surfaceline has a presence on 700 routes in India with 350 trucks and the company plans to enhance this number three to four times by next year. Though the company does not own nor has any plans to own fleet of trucks, Mr Dhingra said the product will "adhere to strictly with the quality assurance of Blue Dart".

Supporting its ground services, the freight carrier will be investing in warehouses, IT systems to keep a track on the movement of trucks and so on, similar to its air cargo business, he said.

Share price of Blue Dart remained flat on Friday at Rs 635 against previous day's close of Rs 635.15.

More Stories on : Financial Performance | Supply Chain Management | Outlook

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
RMAAI releases first rural retail study

Blue Dart Q2 net rises 24% on service efficiencies