X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 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.
GE Shipping: Buoyancy to continue? - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Oct 31, 2001

    GE Shipping: Buoyancy to continue?

    The Great Eastern Shipping Company (Gesco) has reported yet another superb performance for 2QFY02. While revenue growth at 24.7% is impressive, the company has managed to increase operating margins significantly in the current quarter.

    (Rs m) 2QFY01 2QFY02 Change 1HFY01 1HFY02 Change
    Sales 2,363 2,947 24.7% 4,800 6,328 31.8%
    Other Income 150 71 -52.7% 208 114 -44.9%
    Expenditure 1,448 1,767 22.0% 2,926 3,845 31.4%
    Operating Profit (EBDIT) 915 1,180 29.0% 1,874 2,483 32.5%
    Operating Profit Margin (%) 38.7% 40.0%   39.0% 39.2%  
    Interest 188 149 -20.5% 372 293 -21.3%
    Depreciation 522 535 2.4% 1,014 1,020 0.6%
    Profit before Tax 355 567 59.8% 695 1,285 84.7%
    Extraordinary item 2 -   190 -  
    Tax 30 124 319.0% 73 225 207.4%
    Profit after Tax/(Loss) 328 443 35.3% 813 1,060 30.4%
    Net profit margin (%) 13.9% 15.0%   16.9% 16.8%  
    No. of Shares (eoy) (m) 258.8 214.8   258.8 214.8  
    Diluted number of shares 214.8 214.8   214.8 214.8  
    Earnings per share (Rs)* 6.1 8.2   7.6 9.9  
    (*annualised)            

    Revenue from shipping operations grew by 30.8% in 2QFY02 to Rs 2,175 m and offshore division also posted a 7.6% growth in revenues. The company had recovered almost 35% of FY01 crude tanker revenues in the first quarter of the current financial year itself. It had also covered 35% of product tanker revenues in 1QFY02 and this seems to have resulted in higher shipping revenues despite a slowdown in world trade.

    Income break-up...
    (Rs m) 2QFY01 2QFY02 Change 1HFY01 1HFY02 Change
    Shipping 1,662 2,175 30.8% 3,321 4,558 37.3%
    Offshore 508 547 7.6% 1,048 1,269 21.2%
    Others 193 225 17.0% 431 501 16.1%
    Total 2,363 2,947 24.7% 4,800 6,328 31.8%

    Though direct operating expenses increased by 84% to Rs 4,880 m in 2QFY02, a significant fall in cost of sales and other expenses enabled the company to increase operating margins by 130 basis points to 40% in 2QFY02. The company had embarked on a capital expenditure of Rs 8 bn over a three-year horizon for augmenting its fleet, especially the Aframax tankers. Towards this, it has acquired one bulk carrier and a harbor tug vessel in the current quarter at an aggregate cost of US$ 15.7 m (Rs 754 m).

    For the first half, profits have risen by 30.4% to Rs 1,060 m. But if one were to exclude the extraordinary income in the corresponding quarter of the previous year i.e. income from sale of ships and other assets, profits have actually increased by 70% for 1HFY02. The company has bought back and extinguished 1 m shares in the current quarter as per its second buy-back plan, thereby reducing the number of shares to 215 m.

    The scrip is currently trading at Rs 23 on a P/E multiple of 2.3x the annualised 1HFY02 earnings. The buoyancy 2QFY02 revenues might not sustain in the coming quarters in light of the slowdown in the global economy. Already, both tanker and dry-bulk rates have come off significantly. Though OPEC has promised not to cut crude throughput (with crude prices hovering around US$ 24-US$ 25 per barrel), crude demand is expected to lower towards the end of the current financial year. The actual estimates of 1.8% in crude demand by the International Energy Agency (IEA) has also come under cloud due to a subdued industrial activity in all the major economies like US, Japan and the European Union.

     

     

    Equitymaster requests your view! Post a comment on "GE Shipping: Buoyancy to continue?". Click here!

      
     

    More Views on News

    G E Shipping: Feeling Pressure From the Offshore Segment (Quarterly Results Update - Detailed)

    Aug 18, 2017

    GE Shipping reported a subdued performance on the back weak offshore segment.

    G E Shipping: A Bad Quarter (Quarterly Results Update - Detailed)

    May 9, 2017

    GE shipping registered a loss in 4QFY17 due to weak global shipping market and lower crude prices which negatively impacted the offshore segment.

    G E Shipping: Crude, Product, and Offshore Segment Drag Performance (Quarterly Results Update - Detailed)

    Feb 16, 2017

    G E Shipping has reported a 22.8% YoY decline in the topline while the bottomline has declined by 33.4% YoY.

    Cochin Shipyard Limited (IPO)

    Aug 1, 2017

    Should you subscribe to the IPO of Cochin Shipyard Ltd?

    G E Shipping: Pressure from All Segments Drags Performance (Quarterly Results Update - Detailed)

    Nov 21, 2016

    G E Shipping has reported a 20.2% YoY decline in the topline while the bottomline has declined by 24% YoY.

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    G.E.SHIPPING SHARE PRICE


    Aug 18, 2017 (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 8-QTR ANALYSIS

    Detailed Quarterly Results With Charts

    COMPARE G.E.SHIPPING WITH

    MARKET STATS