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.
GE Shipping: Disappointing Performance - 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?  

GE Shipping: Disappointing Performance
Nov 16, 2017

GE Shipping has announced the second quarter results of the financial year 2017-2018 (2QFY18). The company has reported a 13.5% YoY decline in the topline while the bottomline has declined by 97.6% YoY. Here is our analysis of the results.

Performance summary
  • Consolidated topline declined by 13.5% on a YoY basis whereas standalone topline increased by 6.9% YoY.
  • Operating profit declined during the quarter by 27.8% YoY. Operating margin declined by 8.2% and stood at 41.6%.
  • Other income declined by 36% YoY during this quarter. Similarly, Finance cost and Depreciation seen an increase of 51.7% YoY and 12% YoY respectively.
  • Tax liability increased by 113.4% YoY due to one-time dividend payment by Greatship Singapore subsidy. Net profit declined by 97.6% during the quarter.

    Financial Snapshot
      Consolidated Consolidated
    (Rs m) 2QFY17 2QFY18 Change 1HFY17 1HFY18 Change
    Net sales 8,118 7,024 -13.5% 16,215 14,400 -11.2%
    Expenditure 4,072 4,101 0.7% 7,394 8,388 13.4%
    Operating profit (EBDITA) 4,046 2,923 -27.8% 8,821 6,012 -31.8%
    EBDITA margin (%) 49.8% 41.6%   54.4% 41.7%  
    Other income 1,764 1,128 -36.0% 2,253 2,327 3.3%
    Finance cost 953 1,445 51.7% 1,729 2,469 42.8%
    Depreciation 1,698 1,902 12.0% 3,622 3,749 3.5%
    Profit before tax 3159 704 -77.7% 5724 2120 -63.0%
    Tax 298 635 113.4% 700 1016 45.2%
    Net Profit 2,862 69 -97.6% 5,024 1,104 -78.0%
    Net profit margin (%) 35.3% 1.0%   31.0% 7.7%  
    No. of shares (m)         150.8  
    Diluted earnings per share (Rs)*         20.9  
    Price to earnings ratio (x)*         17.7  

    (* on trailing twelve months earnings)

  • What has driven performance in 2QFY18?

  • The crude carrier segment witnessed pressure during the quarter with average TCY for crude carriers declined by 32.3% YoY. This is on the back of supply pressure which continues to remain on the crude side. Product carrier TCY also declined during the quarter by 30.7% YoY. Crude and product fleet growth were around 6% and 5% respectively. The dry bulk segment benefitted from a reversal in commodity cycle due to growth in commodity trade in China. The seaborne coal imports to China increased significantly during the quarter. Fleet growth in the dry bulk segment remained low at 2%. This also helped the market to recover from the lows of 2016.

    Average (TCY $ Per day) 2QFY17 2QFY18 Change
    Crude carrier 23,591 15,975 -32.3%
    Product carrier 19,975 13,833 -30.7%
    Dry Bulk 6,324 8,940 41.4%
  • On the offshore side, the market continues to be challenging. The offshore segment is affected by reduced E&P (Exploration and Production) spending by the oil majors. Due to this, fewer new contracts are coming up and this has caused large amounts of unutilized capacity in the sector. Globally the utilization number of assets in the offshore space has come down to below 50%. There was a decline in the topline due to lower utilization and lower TCY on the re-priced contract. In November, 2 rigs- Chetna and Chaya were contracted for 3 years each. However, the day rates are significantly lower than the previous contract. (~75% below earlier rates).

    Breakup of Revenue Days (Offshore)
    Revenue Days 2QFY17 2QFY18 Change
    Offshore Logistics 1,521 1,466 -3.6%
    Drilling Services 363 271 -25.3%
    Total 1,884 1,737 -7.8%
  • On the operating margin front, the company witnessed some pressure due to a sharp increase in other expenses which include repairs and maintenance, fuel oil and water. Fuel oil expense increased by 66% YoY on the back of an increase in crude oil prices. Finance cost increased 51.7% YoY on the back of a significant increase in borrowing in the last 12 months.
  • Tax liability increased by 113.4% YoY due to one-time dividend payment by Greatship Singapore subsidy. Net profit during the quarter declined by 97.6% on YoY basis on the back of decline in operating profit, an increase in depreciation expenses, finance cost and tax outgo.
To Read the Full Story, Subscribe or Sign In



DISCLOSURES UNDER SEBI (RESEARCH ANALYSTS) REGULATIONS, 2014
INTRODUCTION:
Equitymaster Agora Research Private Limited (hereinafter referred to as "Equitymaster"/"Company") was incorporated on October 25, 2007. Equitymaster is a joint venture between Quantum Information Services Private Limited (QIS) and Agora group. Equitymaster is a SEBI registered Research Analyst under the SEBI (Research Analysts) Regulations, 2014 with registration number INH000000537.

BUSINESS ACTIVITY:
An independent research initiative, Equitymaster is committed to providing honest and unbiased views, opinions and recommendations on various investment opportunities across asset classes.

DISCIPLINARY HISTORY:
There are no outstanding litigations against the Company, it subsidiaries and its Directors.

GENERAL TERMS AND CONDITIONS FOR RESEARCH REPORT:
For the terms and conditions for research reports click here.

DETAILS OF ASSOCIATES:
Details of Associates are available here.

DISCLOSURE WITH REGARDS TO OWNERSHIP AND MATERIAL CONFLICTS OF INTEREST:
  1. 'subject company' is a company on which a buy/sell/hold view or target price is given/changed in this Research Report
  2. Neither Equitymaster, it's Associates, Research Analyst or his/her relative have any financial interest in the subject company.
  3. Neither Equitymaster, it's Associates, Research Analyst or his/her relative have actual/beneficial ownership of one percent or more securities of the subject company at the end of the month immediately preceding the date of publication of the research report.
  4. Neither Equitymaster, it's Associates, Research Analyst or his/her relative have any other material conflict of interest at the time of publication of the research report.
DISCLOSURE WITH REGARDS TO RECEIPT OF COMPENSATION:
  1. Neither Equitymaster nor it's Associates have received any compensation from the subject company in the past twelve months.
  2. Neither Equitymaster nor it's Associates have managed or co-managed public offering of securities for the subject company in the past twelve months.
  3. Neither Equitymaster nor it's Associates have received any compensation for investment banking or merchant banking or brokerage services from the subject company in the past twelve months.
  4. Neither Equitymaster nor it's Associates have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past twelve months.
  5. Neither Equitymaster nor it's Associates have received any compensation or other benefits from the subject company or third party in connection with the research report.
GENERAL DISCLOSURES:
  1. The Research Analyst has not served as an officer, director or employee of the subject company.
  2. Equitymaster or the Research Analyst has not been engaged in market making activity for the subject company.
Definitions of Terms Used:
  1. Buy recommendation: This means that the subscriber could consider buying the concerned stock at current market price keeping in mind the tenure and objective of the recommendation service.
  2. Hold recommendation: This means that the subscriber could consider holding on to the shares of the company until further update and not buy more of the stock at current market price.
  3. Buy at lower price: This means that the subscriber should wait for some correction in the market price so that the stock can be bought at more attractive valuations keeping in mind the tenure and the objective of the service.
  4. Sell recommendation: This means that the subscriber could consider selling the stock at current market price keeping in mind the objective of the recommendation service.
Feedback:
If you have any feedback or query or wish to report a matter, please do not hesitate to write to us.

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 8-QTR ANALYSIS

COMPARE G.E.SHIPPING WITH

MARKET STATS