The Shipping Corporation of India (SCI) Q4 96/97 earnings summary

Executive summary

• Gross earnings rose 9% YoY to Rs 2,442 crore, while net profit declined to Rs 233.27 crore from Rs 323.40 crore, reflecting higher finance costs, tax and operating expenses.

• Operations expanded voyages on new routes, but freight-rate pressure weighed on dry bulk and liner results; crude and product tanker markets remained firm.

Financial highlights

• Gross earnings were Rs 2,442 crore vs Rs 2,249 crore; operating earnings were Rs 2,269.72 crore vs Rs 2,128.90 crore.

• Profit before tax was Rs 273.59 crore vs Rs 323.40 crore; net profit was Rs 233.27 crore vs Rs 323.40 crore.

• Gross profit before interest, depreciation and tax fell to Rs 706 crore from Rs 741 crore; interest and finance charges rose to Rs 200 crore from Rs 176 crore, while depreciation was Rs 236 crore vs Rs 232 crore.

• Operating expenses increased to Rs 1,603.98 crore from Rs 1,387.61 crore; income-tax provision rose to Rs 40.31 crore from Rs 0.01 crore.

• Proposed dividend was 20%, absorbing Rs 56.46 crore; dividend tax was Rs 5.65 crore.

Outlook and guidance

• Crude and product tanker demand and freight rates were expected to remain firm, with tanker earnings forecast to increase in the current year.

• The Ninth Plan acquisition programme targets 44 vessels totaling 1.20 million GT and 1.95 million DWT, with investment of US$1,237 million (Rs 4,515 crore).

• FY1997-98 acquisition plans covered 17 vessels—12 newbuildings and 5 secondhand—with investment of US$501.11 million (Rs 1,829.05 crore).

• Dry bulk market recovery was conditional on trade growth near 3% p.a., continued scrapping of older tonnage and prudent new orders.