Essar Shipping Q4 net plunges 99.91% to Rs 5 lakh

MUMBAI: Essar Shipping's consolidated net profit plunged 99.91 per cent to Rs 5 lakh during the fourth quarter ended March 31, hit hard by dismal performances of its shipping and logistics businesses as well as rising costs.

The Essar group company had reported a net profit of Rs 54.98 crore in the January-March quarter of 2011-12.

Its total income from operations was down 11.78 per cent at Rs 729.08 crore during the quarter due to decline in revenues from two major business segments -- fleet operations and logistics services, it said in a filing to the BSE today.

In Q4 of FY'12, it was Rs 826.41 crore. While Essar's gross revenues from fleet operations or shipping business was down nearly 4 per cent to Rs 370.28 crore in Q4, logistics business reported decline of over 25 per cent at Rs 222.94 crore.

The oilfield services business posted a meagre growth of 1 per cent at Rs 151.82 crore during the quarter.

Moreover, the company's operating costs increased in Q4 as its total expenditure, at Rs 678.55 crore, amounted to 92.55 per cent of its total income. In the Q4 of FY'12, its expenditure was nearly 84 per cent of its total income.

"The shipping business has faced challenges due to the depressed markets and freight levels globally. The robust performance of the oilfields services business has enabled the company to maintain its consolidated profitability in line with the previous year," Essar said in a separate statement.

For the full 2012-13 fiscal, the company's consolidated net profit declined marginally by 2.80 per cent at Rs 35.80 crore vis-a-vis Rs 36.83 crore of FY'12.

Its total income in the last fiscal rose by 14.55 per cent at Rs 3,209.19 crore.

"The company is now fully focused on managing operating costs effectively. Together with specific measures for interest cost reduction being pursued, these measures will strengthen the performance of the company in the coming months and help increase profitability," Essar's Director and CEO (Sea Transportation Business) Captain Anoop Sharma said.

He added that during the year, Essar has taken delivery of its all six mini cape dry bulk carriers built at STX Shipyard.

Meanwhile, in a separate announcement, the company said that Anshuman Ruia, its promoter and non-executive director has stepped down from its Board with immediate effect, though it did not specified the reasons for Ruia's resignation.

Essar Shipping scrip rose by 7.16 per cent to close at Rs 22.45 on the BSE.