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Net profit of Essar Shipping declines

Net profit of Essar Shipping declines

Net profit of Essar Shipping declined to Rs 17.85 crore during Oct-Dec 2012 from Rs 48.65 crore in the corresponding period of last year because of higher costs and low crude freight rates in crude oil transportation.

The firm reported revenue of Rs 792.66 crore, EBITDA of Rs 221.68 crore during the above quarter compared to the respective numbers of Rs 729.20 crore and Rs 242.29 crore during the year-ago period.

The reduction in the profitability during the quarter has been on account of subdued freight rates in the crude oil transportation segment of the sea transportation business.

The sea transportation business registered revenue of Rs 377.27 crore during the quarter as compared to Rs 298.30 crore for the corresponding period in the previous year. The EBITDA for Q3 2012-13 stood at Rs 92.24 crore as compared to Rs 129.81 crore in Q3 2011-12.

The company said the freight markets were challenging, and the Baltic index declined over 60 percent when compared with the same period previous year.

Despite tough market conditions such strong performance is primarily because of the companyÂ’s strategy to enter into long term charter of the vessels which provides a natural hedge against the cyclical nature of the industry and ensures long-term visibility of revenues and profitability.

The Oilfield Services revenues stood at Rs 177.50. The company has inducted two more MiniCapes Vessels into its growing Fleet increasing the tonnage to 2 million DWT.

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