Asia/Pacific News
SCI Widen Losses as Bunker Costs Jump 40%
Shipping Corporation of India Ltd. (SCI) has released its latest Q1 2013 financial results for the period ended June 30, 2012 showing it widened its losses to LAKH 5,487 (USD $9.91 million) from LAKH 586 (USD $1.05 million) in the same period last year.
SCI Chairman and Managing Director Mr S. Hajara told Indian business news channel CNBC-TV18 that the cost of bunkers was a "key factor" in the result, which rose LAKH 12,671 ($22.7 million) over Q1 2012 to LAKH 44,714 ($80.4 million), a jump of almost 40%, but were down slightly from Q4 2012's bunker bill of LAKH 45,518 ($81.9 million).
Bunker costs at 2012 year end were LAKH 1,56,034 ($281.0 million), putting last financial year's average quarterly bunker cost at LAKH 39,009 ($70.3 million).
Foreign Exchange
Hajara said the second most important factor in the result was a loss of 76 crore ($13.67 million) in foreign exchange reevaluation, which he stressed was not a cash loss but had to be done as per Indian accounting standards.
"As a matter of fact we have taken up the matter with the department of company affairs because we consider that shipping, having a natural hedge, should not be subjected to this provision," he said.
The Q1 2013 results showed improvement in SCI's liner segment, reducing its before tax and interest loss to LAKH 4050 ($7.3 million) from a loss of LAKH 6132 ($11.0 million) for the same period in 2011.
SCI's bulk segment grew its net profit before tax and interest to LAKH 5010 ($9.0 million) for Q1 2013, up from LAKH 3015 ($5.3 million) in Q1 2012.
Fleet changes in the quarter saw SCI add the 2,067 dwt anchor handling tug supply vessel (AHTSV) M.V. SCI Kundan and the 57,132 dwt bulk carrier M.V. Vishva Diksha to its roster, while passenger vessel M.V. Ramanujam and bulk carriers M.V. Dakshineshwar and M.V. Gangasagar, 47,422 dwt and 47,281 dwt respectively, were sold.
Looking ahead, Hajara said that globally, the "fundamentals are not strong as far as 2012 is concerned" and that "the growth of supply in every segment of shipping is likely to outpace the growth in demand."
"We do hope that by the middle of 2013, the fortune of shipping companies will improve," he added.
With respect to the impact of EU sanctions against Iran, Hajara said that while SCI managed to get some cover from Indian insurance companies, it "unfortunately, proved to be most inadequate."
