The Hindu Business Line : GE Shipping posts Rs 288-cr net in Q3

GREAT Eastern Shippinghas recorded its highest every quarterly profit, with its net profit during the third quarter of the current fiscal touching Rs 287.50 crore, as against Rs 110 crore in the corresponding quarter, representing an increase of 161 per cent.

During the quarter, its income was Rs 633.24 crore against Rs 354.59 crore in the corresponding quarter, an increase of 78 per cent.

The board of directors of the company has declared a second interim equity dividend of Rs 2.50 per share, which would result in an outflow of Rs 53.80 crore (including tax thereon). This, along with the first interim dividend declared in October 2004, has resulted in a total outflow of Rs 75.33 crore.

According to Mr Bharat Seth, Managing Director, the main drivers of the quarter's performance were significantly higher tanker earnings, strong dry bulk earnings, an increase in shipping revenue days by around 18 per cent at 3,571 days and profit from sales of assets.

Crude carriers recorded an average TCY (Time Charter Yield) of about $40,592 per day, as against $22,600 per day in the third quarter of last fiscal, representing an increase of 80 per cent, while products carriers recorded an average TCY of $17,102 per day against $12,300 in the corresponding quarter.

The freight rates were, however, volatile during the quarter. After reaching a record WS (World Scale) 350 in November, which translated into earnings of more than $2 lakh per day, the VLCC (Very Large Crude Carriers) earnings plunged by more than three-quarters in December.

The Baltic Handymax Index, which was 27,630 on October 1, 2004, rose to 30,254 on December 23 and slid to 26,757 on January 26. "In an already prevailing stretched market environment, hurricane Ivan resulted in production loss in US Gulf, which coupled with low US crude oil stocks, led to a sudden increase in demand for long-haul imports, contributing to strong freight rates.

"By mid-December, the freight rates plummeted on OPEC's decision to cut production by one million barrels per day, a milder than expected winter in the US and bunching of tankers at loading ports," according to Mr Seth.

Mr Seth said the company had drawn up a capital expenditure programme of $350 million to add 15 new vessels between early 2005 and mid-2007. The company's current fleet of 70 vessels comprises 40 ships (an average tonnage of 2.76 million DWT with an average age of 14.5 years) and 30 offshore vessels.

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