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State-run Shipping Corporation of India (SCI) is quickening the pace of scrapping older ships from its fleet as India’s biggest maritime carrier looks at ways to prevent the company from slipping into red after running a net loss of ₹82.90 crore in the first half of FY18.
In the first half of FY17, the firm had posted a net profit of ₹39.92 crore.
The first-half net loss was despite a rise in operating revenue to ₹1,673 crore from ₹1,584.71 crore in the year-ago period.
A potential full-year loss in FY18 would mean reversing three continuous years of profits, which again came after three consecutive years of losses at the Navratna firm.
More to be dismantledThe Mumbai-based firm, led by Capt Anoop Kumar Gupta, has culled two container ships since April — MV Indira Gandhi and MV Rajiv Gandhi. The board has also approved scrapping of MT Abul Kalam Azad, a 1999-built crude oil tanker, and MT Bankim Chandra Chatterjee, a 1994-built product carrier, from its fleet.
A couple more of old ships could be chopped by March 2018, said Shipping Ministry sources.
The proceeds from the disposal of ships by dismantling are included in the ‘other income’ head.
Between 2011 and 2014, SCI had resorted to large-scale disposal of ships for scrapping, when it posted losses on the trot.
The company’s liner unit, which runs three container ships, is showing signs of revival after posting an operating profit of ₹19.12 crore during the first half, compared with a loss of ₹79.75 crore in the same period a year earlier. Sequentially, the liner business posted operating profits in the last two quarters. The liner division earned ₹330.10 crore during the first half compared with ₹195.72 crore in the year-ago period.
The bulk carrier unit, which runs 16 ships, posted an operating loss of ₹51.81 crore during the first half compared with an operating loss of ₹110.11 crore in the same period in the previous year. This was despite a rise in revenue to ₹181.83 crore from ₹95.20 crore a year ago.
The operating profit at the tanker unit declined to ₹20.19 crore during April-September from ₹249.28 crore a year earlier. Revenue from tankers also plummeted to ₹1,049.12 crore from ₹1,191.82 crore. SCI runs a fleet of 17 crude oil tankers, 14 product carriers, five very large crude carriers and three gas carriers.
The off-shore business of SCI posted an operating loss of ₹15 lakh during the first six months compared with a profit of ₹8.86 crore in the year-ago period. The offshore unit earned ₹104.24 crore during the first half as against ₹92.70 crore a year earlier.
No functional directorsSCI is currently operating without full-time functional directors at its offshore and liner units after the previous incumbents superannuated in February and July 2017, respectively. Chairman and Managing Director Sharma is holding additional charge of the offshore and liner units.
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