The Hindu Business Line : SCI Q4 net dips 18%

Mumbai June 16 Shipping Corporation of India (SCI) reported an 18.7 per cent dip in its net profit for the last quarter of the last fiscal at Rs 284.65 crore, against Rs 350.13 crore in the corresponding quarter of the previous fiscal.

During the quarter, the company's income was Rs 1,080.56 crore, against Rs 1,159.77 crore.

However, for the whole of the last fiscal, SCI's net profit stood at Rs 1,014.58 crore, against Rs 1,042.2 crore, while its income was Rs 4,210.36 crore, against Rs 3,762.33 crore.

The bulk segment contributed a bulk of the revenue for the shipping company during the year, touching Rs 3,111.55 crore, while the liner segment contributed Rs 731.31 crore. Bulk segment includes tanker (both crude and product), dry bulk carriers, gas carriers and phosphoric carriers, while liner segment includes break-bulk and container cargoes.

Although SCI, like other shipping companies, had to encounter a relatively dull tanker freight market, including in the very large crude carriers segment, for most part of the year, the bulk freight rates firmed up during the last few months of the fiscal to compensate for the lower earnings from the tanker side. The winter in 2006-07, when the tanker freight rates usually soar as oil consumption increases for heating requirements, was relatively disappointing for shipping companies.

Upward march

Bulk rates, on the other hand, steadily staged an upward march during the latter part of the fiscal, accentuated by the congestion at Australia's New Castle port, the world's biggest coal handling port.

Even by the end of April and towards beginning of May this year, about 70 to 75 ships were waiting for berths at the Australian port, the waiting period stretching even up to 30 days — during that time about 12 per cent of the world's capsize vessels were reported to be blocked in the New Castle queue.

This led to a global shortage in supply of vessels, which pushed up freight rates in this segment.

Reports indicated that in the last quarter of last fiscal, the one-year average time charter rate for a Capesize vessel was about $ 69,000 per day, as against $ 45,200 per day for the whole of 2006.

Analysts feel that the bulk freight rates are unlikely to soften in the current fiscal, although tanker rates could be volatile.

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