The Great Eastern Shipping Company (500620) Q4 97/98 earnings summary

Executive summary

• FY98 revenue reached Rs. 9,641m, PBIDT Rs. 4,206m and PAT Rs. 1,642m, all above FY97; diversified operations supported improved performance despite difficult shipping and property markets.

• Cash earnings were a record Rs. 3,200m, with a record dividend of Rs. 4 per share declared for the year.

Financial highlights

• Revenue Rs. 9,641m vs. Rs. 8,781m; operating profit (PBIDT) Rs. 4,206m vs. Rs. 3,530m; PAT Rs. 1,642m vs. Rs. 1,364m, FY98 vs. FY97.

• PBT was Rs. 1,912m vs. Rs. 1,614m; tax provision Rs. 270m vs. Rs. 250m.

• Dividend totaled Rs. 4 per share: Rs. 2.50 interim and Rs. 1.50 proposed final; capital investment was Rs. 2,181m vs. Rs. 2,635m.

• Income from operations was Rs. 9,151m vs. Rs. 7,978m; interest earned fell to Rs. 381m from Rs. 615m.

Outlook and guidance

• Dry bulk earnings likely to fall further in 1998-99 as margins remain pressured and fleet capacity is lower.

• Tanker earnings outlook remained uncertain pending July 1998 charter renegotiations and the impact of the Asian crisis on rates.

• Offshore operations expected to maintain performance in 1998-99; property plans include selective undervalued acquisitions and development of business centres and serviced apartments.

• Dry bulk demand and net supply were expected to stay flat in 1998; tanker supply was projected to grow faster than demand, with scrapping a key market factor.