Shipping Corporation of India Supported by Low Bunker Prices

SCI is said to have retained significant cost savings its third quarter, in part due to low bunker prices.

The Shipping Corporation of India (SCI) [BOM:523598] is said to have nearly doubled its third quarter net profit as a new depreciation provision and lower bunker prices helped provide a significant boost for the company, despite poor global trading conditions.

For the three months to December, state-owned SCI is said to have posted a net income of Rs. 59.66 crore ($8.7 million), a significant increase on the Rs. 31.35 crore ($4.6 million) recorded during the same period the previous year.

Bunker fuel costs for the period came in at Rs. 164 crore ($24.0 million), down almost 38 percent on the Rs. 263 crore ($38.4 million) spent during the period in 2014.

SCI is reported to have also got a helping hand from a new accounting system for ship fleet depreciation, which added Rs. 50.6 crore ($7.4 million) to the total quarterly operating profit.

"The company, while calculating the depreciation, has adopted the residual value of all vessels at 5 percent of initial cost of vessels as against rupee one considered earlier, keeping in view the actual realization in the past," stated SCI.

"Consequent to the change, the depreciation for the quarter ended December 31 is lower and the profit for the quarter is higher."

In presumably other welcome news, despite dry bulk experiencing it's lowest point of 2015 during the quarter, bulk shipping income for the three month period ending December 2015 is said to have been Rs. 771 crore ($112.7 million), a1.6 percent increase compared to the period in 2014.

Last month Ship & Bunker reported that officials in India had been calling for bunker tax exemption for Indian flagged vessels.