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G E Shipping net declines by 12% - Views on News from Equitymaster
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  • May 4, 2000

    G E Shipping net declines by 12%

    G E Shipping has posted a flat topline growth during the year ended 31st march 2000. The company recorded a 4% drop in operating margins to 31% in the current year.

    (Rs m) FY1999 FY2000 Change
    Sales 9,290 9,146 -1.5%
    Other Income 514 319 -37.9%
    Expenditure 6,039 6,260 3.7%
    Operating Profit (EBDIT) 3,251 2,886 -11.2%
    Operating Profit Margin (%) 35.0% 31.6%  
    Interest 578 608 5.2%
    Depreciation 1,647 1,812 10.0%
    Profit before Tax 1,539 785 -49.0%
    Other Adjustments* 5 480 8781.5%
    Tax 280 160 -42.9%
    Profit after Tax/(Loss) 1,264 1,105 -12.6%
    Net profit margin (%) 13.6% 12.1%  
    Earnings per share 4.4 4.3  

    The income from shipping and offshore services has increased 2.2% and 21.7% respectively to Rs 2,703 m and Rs 2,644 m. The gain on sale of assets and vessels has rescued the net profits from declining sharply.

    The company towards its restructuring process has hived off its property division to Gesco Corporation Ltd. It has also reduced its equity share capital to 258,841,206 from 287,601,340 under the de-merger plan and has converted its face value from Rs.10 to Rs 9 and consequently these shares are converted at 9 shares of Rs 10 each.

    Face Value
    Share capital
    Previous years
    share capital
    287,601,340 10 2,876,013,400
    Change in face value
    from Rs 10 to Rs 9
    287,601,340 9 2,588,412,060
    New Share Capital (conversion of
    9 equity shares of Rs 10 each)
    258,841,206 10 2,588,412,060

    With exports and imports growing at 12% and 11% in FY2000 respectively, the trade scenario is looking good and this should benefit G E Shipping in coming months. The company is also looking towards the LPG trasportation services, which account for a major portion of imports. This would provide furhter growth opportunites for the company.

    The stock is currently trading Rs 14.50 at a P/E multiple of 3.4 times compared to the previous years P/E of 5 times on the FY99 earnings.



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