Mumbai: Essar Shipping Limited (ESL) announced its financial results for the quarter ended June 30, 2013. The results were taken on record at the meeting of the Board of Directors of the company held on August 7, 2013.
Q1FY14 financial highlights
During Q1 FY2014, the company registered consolidated revenue of Rs523.18 crore, EBITDA of Rs229.07 crore and PAT of Rs19.41 crore. For the corresponding quarter last year, the company had registered revenue of Rs925.18 crore, EBITDA of Rs252.06 crore and PAT of Rs53.90 crore.
Commenting on the results, Mr A R Ramakrishnan, Managing Director, said, “The reduction in revenue was mainly due to scale down of logistics services done through Essar Logistics Limited (ELL). This was in line with the plan of Essar Shipping Limited to focus on its core high EBITDA margin business activities viz. sea transportation and oilfields services.”
The EBITDA margin on a consolidated basis has increased to 44% during the current quarter as compared to 27% in the corresponding quarter of previous year.
The shipping business registered a turnover of Rs325.80 crore, EBITDA of Rs99.59 crore and net profit of Rs3.63 crore after providing for depreciation of Rs40.90 crore as against turnover of Rs460.77 crore, EBITDA of Rs119.24 crore and net profit of Rs17.24 crore after providing for depreciation of Rs44.73 crore in the corresponding quarter of the previous year.
Commenting on the results of the shipping business, Capt. Anoop Sharma, Director & CEO, Sea Transportation Business, said, “The shipping industry continues to face challenging times on freight rates and reduced availability of cargo quantities. However, the company is fully focused on leveraging long term contracts and managing operating costs effectively. Along with specific measures for interest cost reduction being pursued, these will strengthen the performance of the company in the coming months and help improve profitability.”
During Q1 FY14, the oilfields services business registered a turnover of Rs173.52 crore, EBITDA of Rs113.33 crore and net profit of Rs11.57 crore.
Reconstitution of the board
The company has reconstituted its Board of Directors by adding three industry stalwarts, Mr Michael Pinto, Capt. B S Kumar, and Dr N C Singhal as independent directors. This will strengthen the company’s corporate governance capabilities and provide focused guidance to the management for sustained growth.
Mr Pinto (IAS, retired) is a former Secretary (Shipping), Government of India and former Chairman of Jawaharlal Nehru Port Trust.
Capt. Kumar has several decades of experience in the maritime industry both domestic and international.
Mr. Singhal is the founder of the erstwhile Shipping Credit & Investment Company of India Ltd (SICICI).
The board now has an ideal mix of competencies in the fields of maritime industry, governance, finance, strategy and risk management that will add substantial value and give a new direction to the company.
About Essar Shipping
Essar Shipping Limited operates a diversified fleet of 26 vessels, including VLCCs, capesize, mini-capesize, Supramaxes, mini-bulk carriers and tugs. A sizeable part of the capacity is deployed on long-term contracts and COAs, insulating the company from the volatility of spot markets.
The Oilfields Services business provides contract drilling services to oil and gas companies across the globe. This business owns one semi-submersible rig and 14 land rigs. The company has two new jack-up rigs on order.
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Mr Jatin Aggarwal
Essar Shipping Limited