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Mercator in the News
Mercator Lines performs well for 1Q ended June 2006. SALES : Rs. 176.38 crores OPERATING PROFIT : Rs. 60.73 crores Mercator Lines Limited has performed well during the first quarter of the FY 2007. Income from operations is up 25% to Rs. 176.38 crores as compared to Rs. 140.56 crores. The operating profit is lower at 60.73 crores as compared to 71.33 crores. This is primarily on account of the dry docking expenses for the two vessels, one being a VLCC and another a MR tanker which underwent dry docking repairs during the quarter, which is periodically carried out every 2.5/3 years. The entire expenses amounting to Rs. 21.56 crores (previous year Nil) has been fully charged off during the quarter under review. The Company during the quarter took this strategic decision of having both the vessels under dry docking when the freight rates were soft on account of higher than normal refinery maintenance world over and especially in the US as the refinery maintenance were deferred due to Katrina, leading to lower crude demand. The interest cost is Rs. 15.06 crores as compared to Rs. 9.07 crores, an increase of 66% on account of acquisition of vessels last year. After charging a much higher depreciation of Rs. 26.32 crores ( Rs. 18.46 crores) and tax of Rs. 1.02 crores (Rs. (1.88 crores), the Profit after tax is Rs. 18.33 crores as compared to Rs. 41.92 crores. Consolidated Performance The Company on a consolidated basis has performed very well with the income from operations at Rs. 265.43 crores. The operating profit is Rs. 74.08 crores and the Company earned a profit after tax of Rs. 26.80 crores. The Company had no operational subsidiaries during the corresponding quarter of the previous year and hence, previous years figures are not available. Outlook The global economy is expected to grow at a fairly healthy rate and the Asian countries especially, India and China continues to grow at a fast pace. Also the non OECD countries have widened their search for oil supplies which have led to longer haul routes, driving the ton mile demand upwards and thereby firming the tanker freight rates. India would also continue to remain a large importer of coal on account of the impetus for generating more power and implementation of mega power stations. This also would lead to firm dry bulk freight rates in this region. We expect firm freight rates to dominate the second half of 2006, as high growth countries such as China and India continue to remain purchasers of raw materials such as Crude oil, Coal and Iron Ore from distant suppliers and maintaining a high ton-mile demand. |
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