Shipping Corporation of India posts 428-cr loss on fuel, interest costs

MUMBAI: Shipping Corporation of India ( SCI) plunged into a massive loss for the year ended March 2012 as fuel and interest costs soared.

Mumbai-based SCI posted a loss of 428 crore compared with a net profit of 567 crore in the year ago period. Bunker fuel costs more than doubled, while finance costs rose as much as six times to 387 crore. SCI's total revenue for the year rose 13% to 4,308 crore. "The results are in sync with the trend globally. Many of the shipping companies across the globe are posting losses.

Going forward, we have restructured some of our liner services, but we are not very sure that the bulk market will improve. Tanker and offshore division should grow in the coming months," S Hajara, chairman, SCI told ET. SCI loss in the Jan-March quarter alone was 355 crore. The company's revenue for the full year rose 13% to 4,308 crore. Shares of SCI rose marginally to close at 55.65 in an otherwise flat BSE ahead of the results.

SCI had said that the company was looking to acquire around 62 vessels in the 11th plan period extending from 2007-2012 at an estimated cost of $5 billion, but a slow down in the global economy and excess supply of vessels forced it to nearly halve it to 36.

The increase in crude oil prices over the last year led to a sharp hike in prices of bunker fuel, which is a type of fuel oil that is used in ships. Singapore's benchmark bunker price BK 380 rose to as much as $719 per tonne in May. Bunker fuel costs, on an average, form nearly one-third of the total operating costs for shipping companies.