Essar shipping brought down its net loss to Rs 40 crore in the second quarter 2012-13 results from Rs 85.65 crore net loss in the corresponding period last year. Company’s total revenue increased by 31 per cent to Rs 798 crore for quarter ending September 2012.
For the first half of year 2012-13, the company registered a net profit of Rs 17.91 crore as against a loss of Rs 66.82 crore in first half of last financial year.
The company is planning to reduce its debt of Rs 5,500 crore through a multi-pronged strategy. The company will convert some of its loans into dollars and pay some part of it through internal accruals. “We will also try to reduce the interest rates on some part of our loans. This is an ongoing effort and by what percentage we can reduce our debt will also depend on lender’s appetite,” said A R Ramakrishnan, managing director, Essar Shipping.
Essar Shipping sold two of its 1983 built ships MV Govind Prasad and MV Mahavir Prasad during the quarter. This has helped the company in bringing down the average age of the fleet to 13.5 years.
The company is expecting that the freight situation will improve in another six to nine months. Currently over 50 per cent of Essar Shipping’s fleet is employed in long term contracts.
The company is also betting big on its oilfield services business, which increased by 394 per cent to Rs.165.65 crore in Q2FY13 from Rs.33.36 crore for Q2FY12, in revenue terms. “The oilfields services business continues to maintain its strong performance and is expected to contribute positively to the business,” Ramakrishnan added.