The Shipping Corporation of India (SCI) Q4 98/99 earnings summary

Executive summary

• Gross earnings rose over 2% YoY to Rs 2,582.27 crore, while net profit fell to Rs 201.33 crore from Rs 246.24 crore; a 15% dividend was proposed.

• Operations faced weak freight markets, unresolved tanker rate negotiations and lower profitability; fleet additions and LNG plans supported longer-term growth.

Financial highlights

• Operating earnings were Rs 2,520.84 crore vs Rs 2,414.45 crore; total earnings were Rs 2,582.27 crore vs Rs 2,521.49 crore in 1997-98.

• PBT was Rs 248.35 crore vs Rs 301.26 crore; PAT was Rs 201.33 crore vs Rs 246.24 crore.

• EPS declined to Rs 7.13 from Rs 8.72; proposed dividend including dividend tax totaled Rs 47.01 crore.

• Total expenses rose to Rs 2,337.27 crore from Rs 2,219.85 crore; operating expenses were Rs 1,799.42 crore vs Rs 1,754.26 crore.

Outlook and guidance

• Crude transportation for 1999-2000 continued under an extended IOC contract; negotiations on revised rates and terms were ongoing amid a ~10% drop in tanker time-charter rates YoY.

• RPL refinery output was expected to make the country self-sufficient in HSD by end-1999, potentially leaving MR tankers used for imports surplus and changing coastal vessel requirements.

• LNG carriage was a growth priority: an Enron and Mitsui OSK Lines JV was planned for Dabhol imports, with the first cargo expected in H2 2001, subject to government approval.

• The 9th Plan tonnage program targeted 44 vessels totaling ~1.95 million DWT at estimated investment of US$1.3 billion; approved plan outlay was Rs 5,752 crore.