The Great Eastern Shipping Company (500620) Q4 96/97 earnings summary

Executive summary

• FY97 revenue rose 5.6% to Rs 8,781m; operating profit (PBIDT) increased to Rs 3,529m, while PAT fell to Rs 1,364m from Rs 1,524m.

• Excluding ship-sale gains, operating profit increased 23.2% and PBT rose 6.1%; reported PBT declined 8.8% YoY.

• Performance benefited from buoyant tanker and offshore markets, offset by a severe dry-bulk downturn and a sluggish property market.

Financial highlights

• Total revenue was Rs 8,781m versus Rs 8,312m; operating profit (PBIDT) was Rs 3,529m versus Rs 3,125m.

• PAT was Rs 1,364m versus Rs 1,524m; PBT was Rs 1,614m versus Rs 1,769m.

• EPS was Rs 4.74 versus Rs 5.30; cash earnings per share were Rs 9.00 versus Rs 8.44.

• Proposed dividend was Rs 3/share, totaling Rs 949m including dividend tax; stated payout was nearly 70% of PAT.

• Capital investment was Rs 2,635m versus Rs 5,826m; depreciation rose 35.6% to Rs 1,225m, mainly reflecting the full-year impact of prior fleet expansion.

Outlook and guidance

• FY98 earnings were expected to improve, led by buoyant tanker and offshore markets.

• Bulk Carrier Division expected lower FY98 earnings, partly offset by selling a couple of older vessels; margins were expected to remain under pressure.

• Tanker Division expected higher FY98 earnings from a strong freight market and added capacity; fleet expansion would continue.

• Offshore Division expected improved FY98 earnings through better asset utilization and higher employment rates.

• Property investment was to remain selective; FY98 expansion was budgeted at a limited level, subject to suitable properties.