The Great Eastern Shipping Company (500620) Q4 00/01 earnings summary

Executive summary

• FY00/01 delivered record PBT of Rs 2,014M, driven by strong tanker freight markets, improved dry-bulk earnings and steady offshore business.

• Revenue rose to Rs 10,813M from Rs 9,945M; PAT increased to Rs 1,774M from Rs 1,105M, while EPS nearly doubled to Rs 8.02 from Rs 4.27.

• Global fleet reach expanded, new customers were added, and modernisation, process upgrades and cost reductions supported the strategy to improve service quality and returns.

Financial highlights

• Total revenue Rs 10,813M vs Rs 9,945M; operating profit (PBIDT) Rs 4,740M vs Rs 3,684M; PAT Rs 1,774M vs Rs 1,105M.

• PBT reached Rs 2,014M vs Rs 1,265M; tax provision was Rs 240M vs Rs 160M.

• Operating income was Rs 10,430M vs Rs 9,626M; interest earned Rs 228M vs Rs 208M; other income Rs 155M vs Rs 111M.

• Dividend amount, including tax on equity and preference dividends, was Rs 687M vs Rs 431M; capital investment was Rs 1,491M vs Rs 2,420M.

Outlook and guidance

• Overall shipping outlook for FY01/02 was positive; first-quarter tanker rates had eased from prior-quarter highs, but medium-term demand and supply factors were expected to support healthy markets.

• Tanker outlook benefited from estimated 1.7% oil-demand growth in 2001 and IMO rules expected to remove 15–30% of the current tanker fleet by 2005; short-term market imbalances remained possible.

• Dry-bulk markets were expected to weaken as deliveries from the 1999 ordering surge increased supply over the next 12–18 months.

• Offshore outlook was supported by Indian field redevelopment, NELP activity and port development; 57% of FY00/01 revenue was already covered through employment arrangements as of April 1, 2001.