Great Eastern plans Rs 2,300-cr capex to raise capacity

Company has a $200-mn rig on order, which shall be delivered by year end

Great Eastern Shipping, the largest private sector liner in the country, plans to invest up to $380 million or around Rs 2,300 crore in acquiring vessels and on a rig by March 2017, a senior official has said.

Around $180 million will be for six vessels on order, which include a major thrust on increasing the bulk capacity and one product anchor vessel, and a new building, the group's Chief Financial Officer G Shivakumar told analysts on a con-call.

The company, which is also into the offshore segment, has a $200-million rig on order, which shall be delivered by the end of the fiscal, he said.

To a question on the spread of the capital expenditure, Shivakumar said 50% of the planned capex will get over in FY15 itself, while the remaining will be spread equally in FY16 and FY17.

The city-headquartered shipping line had reported a 6% growth in its revenue to Rs 385.08 crore in the first quarter of the fiscal, while the net profit was down at Rs 87.61 crore from Rs 141.96 crore a year ago, largely due to the fall in other income.

The shipping trade worldwide is going through tough times because of the large capacity creation before the 2008 crisis. Companies complain this has led to a fall in charter rates, even as the commitments on the ordering have to be complied.

In the domestic market, the state-run Shipping Corporation has been sailing through difficult waters for the past many years, with some watchers also comparing it to the case of the loss-making national carrier Air India.