Ruia-owned Essar Shipping posted a 63% drop in net profit to R17.85 crore for the quarter ended December, from R48.65 crore in the corresponding quarter last year, hurt by higher costs and low crude freight rates in crude oil transportation.
The debt-laden company will also extend tenures of loans equivalent to R500-600 crore. In December, Essar Shipping’s managing director AR Ramakrishnan had told FE that the company is in the process of converting R700-800 crore of rupee loans to dollar. The company’s debt stood at R5,500 crore as on December 31.
Essar Shipping clocked a total income of R781,85 crore for the third quarter, up 9.5% from R713.78 crore in the last-year quarter.
“The shipping freight continues to be challenging especially for very large crude carriers, and that has affected the profits this quarter. Added to that, there is an overhang of tonnage oversupply that is challenging,” Ramakrishnan said. The company expects the demand-supply situation to even out by the end of 2013.
Essar Shipping’s share closed up marginally at R27.95 on Wednesday on the Bombay Stock Exchange.