Mercator Lines net slips 56%

Higher dry docking expense has forced operating profit of Mercator Lines (MLL) slip by 15% at Rs 60.73 crore for the quarter-ended June ’06 as against Rs 71.33 crore for the corresponding period last year.

After charging a much higher depreciation of Rs 26.32 crore and tax of Rs 1.02 crore, the net profit has come down by 56% at Rs 18.33 crore as compared to Rs 41.92 crore.

But the revenue has gone up by 25% at Rs 176.38 crore as compared to Rs 140.56 crore. The company on a consolidated basis has registered a revenue of Rs 265.43 crore. The operating profit is Rs 74.08 crore and the company earned a profit after tax of Rs 26.80 crore. The company had no operational subsidiaries during the corresponding quarter of the previous year.

According to a company release, the fall in profit is primarily due to the dry docking expenses of a very large crude carrier (VLCC) and another a MR tanker, which underwent repairs during the quarter. “The entire expenses amounting to Rs 21.56 crore has been fully charged off during the quarter under review. The interest cost in the quarter is Rs 15.06 crore as compared to Rs 9.07 crore, an increase of 66% on account of acquisition of vessels last year,” said the release.

“The company had taken the decision for dry docking because the freight rates were soft on account of the higher than normal refinery maintenance world over, especially in the US as the refinery maintenance were deferred due to Katrina, leading to lower crude demand,” it said.