X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2018 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
G E Shipping: Offshore comes to the rescue - Views on News from Equitymaster
StockSelect
  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

G E Shipping: Offshore comes to the rescue
May 7, 2013

G E Shipping has announced its March quarter results. The company has reported a 6% YoY drop in consolidated topline while the bottomline has registered a strong growth of 114% YoY

Performance summary
  • Consolidated topline comes in lower by 6% on a YoY basis
  • Operating margins contract by 2.2% on the back of adverse movement on most of the cost heads
  • Despite poor operating performance, consolidated bottomline grows by a strong 114% YoY on the back of income from sale of assets and absence of forex losses
  • Standalone bottomline comes in lower by 5% YoY while the topline fell by a similar margin
  • Consolidated profits for the full year grow 70% YoY on the back of a 2% growth in topline

  Consolidated Standalone Consolidated
(Rs m) 4QFY12 4QFY13 Change 4QFY12 4QFY13 Change FY12 FY13 Change
Net sales 8,263 7,753 -6.2% 4,501 4,280 -4.9% 29,555 30,067 1.7%
Expenditure 5,054 4,916 -2.7% 3,170 3,374 6.4% 18,695 18,472 -1.2%
Operating profit (EBDITA) 3,209 2,837 -11.6% 1,332 906 -31.9% 10,860 11,595 6.8%
EBDITA margin (%) 38.8% 36.6%   29.6% 21.2%   36.7% 38.6%  
Other income (11) 747   258 604 134.2% 2,778 3,938 41.8%
Interest (net) 1,121 830 -25.9% 701 481 -31.4% 4,373 3,447 -21.2%
Depreciation 1,429 1,496 4.7% 787 863 9.6% 5,483 5,924 8.0%
Profit before tax 648 1,257 93.9% 102 167 64.2% 3,782 6,162 62.9%
Extraordinary items (200) (318) 59.1% - -   10 (318)  
Tax 51 102 101.4% - 70   583 466 -20.0%
Profit after tax/(loss)  398 837 110.5% 102 97 -4.6% 3,209 5,378 67.6%
Minority Interest 6 -   - -   43 -  
Net profit after minority interest 392 837 113.7% 102 97 -4.6% 3,166 5,378 69.9%
Net profit margin (%) 4.8% 10.8%   2.3% 2.3%   10.9% 17.9%  
No. of shares (m) 152.3 152.3   152.3 152.3   152.3 152.3  
Diluted earnings per share (Rs)*               35.3  
Price to earnings ratio (x)*               6.5  
(* on trailing twelve months earnings)

What has driven performance in 4QFY13?
  • While the shipping segment of the company grew by 2% YoY, there was a growth of 5% in the revenues for the offshore segment. Excluding other income however, topline fell 6% YoY.

  • The company's revenue days were down 8% during the quarter. However there was a significant fall in time charter yields in both the crude carriers and the dry bulk segment and this affected its topline growth. Yields for product carriers however showed improvement and were up 28% YoY.

  • As per the company, the revenues visibility for FY14 is around Rs 3.8 bn with dry bulk carriers covered to the extent of around 26% of the fleet's operating days. Crude tankers and product carriers (incl. gas) are 42% and 56% covered respectively.

    Cost break-up...
      Consolidated Standalone Consolidated
    (Rs m) 4QFY12 4QFY13 Change 4QFY12 4QFY13 Change FY12 FY13 Change
    Employees cost 1,249 1,193 -4.4% 500 502 0.3% 4,646 4,494 -3.3%
    % sales 15.1% 15.4%   11.1% 11.7%   15.7% 14.9%  
    Fuel, oil and water 1,158 826 -28.7% 933 1,200 28.7% 4,160 4,309 3.6%
    % sales 14.0% 10.7%   20.7% 28.0%   14.1% 14.3%  
    Hire of chartered ships/equipments 1,053 1,055 0.2% 556 576 3.7% 3,678 3,461 -5.9%
    % sales 12.7% 13.6%   12.3% 13.5%   12.4% 11.5%  
    Consumption of stores and spares 473 479 1.4% 260 268 3.3% 1,650 1,663 0.8%
    % sales 5.7% 6.2%   5.8% 6.3%   5.6% 5.5%  
    Repairs and maintenance 231 467 102.1% 377 155 -58.9% 1,141 1,371 20.2%
    % sales 2.8% 6.0%   8.4% 3.6%   3.9% 4.6%  
    Others 891 895 0.4% 465 525 13.0% 3,421 3,175 -7.2%
    % sales 10.8% 11.5%   10.3% 12.3%   11.6% 10.6%  

  • On account of a 2.2% contraction in operating margins, operating profits were down to the tune of 12% on a YoY basis. Except for fuel, oil and water charges, all the other cost heads went up as a percentage of sales.

  • A strong jump in other income as also a 26% fall in interest charges has resulted in the company growing by a strong 94% YoY at the PBT level on a consolidated basis. Despite a 101% jump in tax charges the bottomline grew at an impressive rate of 114% YoY.

What to expect?
At the current price of Rs 230, the stock trades at a multiple of around 0.6x its FY15 standalone book value per share. As per the company, while trade is likely to remain robust going forward, a wave of new supply of vessels is likely to put pressure on freight rates. Strong revenue visibility on the offshore side however is a comforting factor as per us. We shall soon come out with a revised set of projections for the company in 2-3 weeks time.

To Read the Full Story, Subscribe or Sign In


Small Investments
BIG Returns

Zero To Millions Guide 2018
Get our special report, Zero To Millions
(2018 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

G.E.SHIPPING SHARE PRICE


Feb 21, 2018 (Close)

TRACK G.E.SHIPPING

  • Track your investment in G.E.SHIPPING with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks

G.E.SHIPPING - VARUN SHIPPING COMPARISON

COMPARE G.E.SHIPPING WITH

MARKET STATS