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GE Shipping: fair winds blowing ahead |
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Saturday, 13 March 2010 |
 With activities picking up after a huge lull, shipping companies have started to garner attention amongst gain. Great Eastern Shipping (GE) reported 6.6% growth in revenues in the December 2009 quarter to touch Rs 706.3 crore.
Higher operating days and firming of freight rates in the December 2009
quarter, especially over the September 2009 quarter helped it to
outperform its peers. Revenue days rose to 3,402 days in December 2009
quarter as against 3,268 days in the September 2009 quarter.
Excluding the extraordinary gain from the sale of a vessel to the tune
of Rs 53.8 crore in the September 2009 quarter, the net profit in the
December 2009 quarter has been higher by 72.6%. TCE per day or Time
Charter Equivalent time charter equivalent, a standard industry measure
of the average daily revenue performance of a vessel for dry bulk
carriers as well as product carriers increased to Rs 20,964 and Rs
19,131 as compared to Rs 17,065 and Rs 18,865 in the September 2009
quarter.
Thanks to this, after dipping to 25.4%, operating margins improved to
28.2% in the December 2009 quarter. Overall, TCE for product tankers
increased while it dropped with respect to crude tankers In the case of
dry bulk vessels.
Moreover, GE is ramping up its fleet, especially in the offshore
segment, which will be scaled up to 27 vessels in financial year 2011-12
from the present 17 vessels. The total fleet size will increase to 74
vessels in 2011-12 from the present 58 vessels. Baltic indices have
risen 60-100% from the lows of 2009, but are below historical averages.
According to analysts at Morgan Stanley, as global growth gains ground
led by recovery in OECD countries, charter rates will rise. Global
ton-mile demand has historically tracked GDP growth. Morgan Stanley
analysts reckon that global ton-mile demand will pick up, driven by
recovery in GDP growth.
Moreover, demolition driven by the MARPOL (Marine Pollution) convention
will moderate the increase in tanker capacity, in reckon analysts.
Even this is expected to support charter rates as supply would tend to
remain constrained in the trade.
Source: Financial Express
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