Essar Shipping posts Q2 net loss of Rs 36 cr

Mumbai: Essar Shipping today reported a consolidated net loss of Rs 35.99 crore for the quarter ended September 30, 2012, largely due to increased finance costs and a forex loss of Rs 50.20 crore.

The company had reported a net loss of Rs 85.65 crore during the corresponding quarter of the last fiscal. Total income from operations of the Ruias-promoted firm was up 30.36 percent to Rs 782.41 crore during the quarter vis-a-vis Rs 600.20 crore in July-September quarter of FY'12, it said in a filing to the BSE.

[caption id=“attachment_516740” align=“alignleft” width=“380”]  During the quarter, company’s total expenditure increased by over 10 percent to Rs 678.36 crore. Reuters[/caption]

During the quarter, company’s total expenditure increased by over 10 percent to Rs 678.36 crore, while the finance cost rose by 16.53 percent to Rs 92.86 crore. Besides, the company also incurred a forex loss of Rs 50.20 crore during the quarter.

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According to the company, the loss took place due to “occurence of the designated highly probable forecasted transactions and expiry of such forward contracts.”

Talking to reporters later through a conference call, Essar Shipping’s Managing Director A R Ramakrishnan said the company is looking to refinance part of its Rs 5,500 crore debt during the current quarter.

“We are trying to convert some rupee loans into dollar loans or to extend the tenure of some of our existing loans. This is in progress, hopefully in a month or two we might make some definitive progress,” he said although declining to disclose the exact amount.

Giving his outlook for the short to medium term, he said that pricing pressure continues to remain on shipping freight rates and the recovery would take about 6-9 months. The Essar Shipping MD also said the company is looking to acquire a couple of ‘capesize’ vessels in the coming quarters.

During the quarter, company’s shipping business registered a growth of 24 percent to Rs 368.66 crore, while its oil field services increased by 394 percent to Rs 165.65 crore. Besides, its logistics business clocked Rs 263.66 crore during the quarter.

For the half year ended September 30, 2012, the company reported a consolidated net profit of Rs 17.91. In the year-ago period, it reported a net loss of Rs 66.82 crore. Its total income from operations was Rs 1,698.25 during the first half of the fiscal against Rs 1,261.40 crore in the corresponding period.

Following the results, shares of the company fell by 5.24 percent to close at Rs 28.95 apiece on the BSE today.

PTI