The Great Eastern Shipping Company (500620) Q4 05/06 earnings summary

Executive summary

• FY05-06 delivered record net profit after prior-period adjustments of Rs. 83,860 lakh on total income of Rs. 234,208 lakh; reported return on average shareholder funds was 37%.

• Results reflect the shipping business after the offshore-services demerger, effective from April 1, 2005; prior-year figures are not comparable.

Financial highlights

• Total revenue was Rs. 234,208 lakh versus Rs. 211,923 lakh; operating profit (PBIDT) was Rs. 134,307 lakh versus Rs. 115,905 lakh, with comparability affected by the demerger.

• Profit after tax was Rs. 84,350 lakh; after prior-period adjustments, net profit was Rs. 83,860 lakh versus Rs. 80,879 lakh in FY04-05.

• Basic and diluted EPS was Rs. 55.07 versus Rs. 42.34; figures are affected by the reduced share capital after demerger.

Outlook and guidance

• FY06 tanker fleet growth was expected near 6% in 2006; spot rates were expected to remain healthy but below FY05 levels as utilisation softened.

• Dry-bulk freight rates were expected to weaken from 2005 as fleet growth of 6–7% outpaced projected commodity-demand growth of 3.5–4.5%.

• For H1 FY07, tanker rates firmed after an initial decline and dry-bulk earnings strengthened; nine vessels were under construction, with committed capex of about US$505 million.