The Great Eastern Shipping Company (500620) Q4 03/04 earnings summary

Executive summary

• FY 2003-04 delivered record profit for the fourth consecutive year; total revenue was Rs 142,635 lakh and net profit Rs 46,747 lakh, versus Rs 100,715 lakh and Rs 21,651 lakh in FY03.

• Fleet tonnage rose 87% to 2.47 million DWT from 1.31 million DWT; 11 vessels were on order, with newbuilding commitments of about $270 million.

• Return on average shareholders’ funds was 19.1%; year-end debt-equity was 1.03:1, and cash surplus equalled 38% of long-term debt.

Financial highlights

• Operating profit (PBIDT) reached Rs 74,000 lakh, up from Rs 45,273 lakh; PBIDT was 51.88% of revenue versus 44.95% in FY03.

• Profit after tax was Rs 46,747 lakh; basic EPS was Rs 24.29 versus Rs 11.36, while cash EPS was Rs 34.86 versus Rs 20.13.

• Adjusted for extraordinary and prior-period items, EPS was Rs 24.1 versus Rs 10.8; the reported net addition from those items was Rs 366 lakh.

• Cash generated from operations was Rs 74,082 lakh; net operating cash flow was Rs 71,845 lakh, while investing cash outflow was Rs 120,182 lakh.

Outlook and guidance

• FY05 outlook was positive, with shipping tonnage demand expected to remain strong; further fleet expansion would be approached prudently given already high freight markets.

• About half of Shipping Division operating days for FY05 were covered by time charters; freight income would continue to be partly hedged to support earnings stability.

• Tanker fundamentals were expected to stay positive as expected demand growth of 3–4% balanced estimated net fleet growth of about 4%; dry bulk markets were forecast healthy but below early-2004 peaks.

• Offshore prospects in India were supported by planned ONGC platform starts and continuing exploration activity under NELP.