ESSAR SHIPPING 2022-23 Annual Report Analysis

Tue, 17 Oct

ESSAR SHIPPING has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the company during FY22-23.

ESSAR SHIPPING Income Statement Analysis

• Operating income during the year fell 81.5% on a year-on-year (YoY) basis.
• The company's operating profit increased by 979.6% YoY during the fiscal. Operating profit margins witnessed a fall and down at 2789.7% in FY23 as against 47.7% in FY22.
• Depreciation charges decreased by 61.2% and finance costs decreased by 63.1% YoY, respectively.
• Other income declined by 53.8% YoY.
• Net profit for the year declined by NA YoY.
• Net profit margins during the year grew from 24.7% in FY22 to 2720.0% in FY23.

ESSAR SHIPPING Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	3,283	607	-81.5%
Other income	Rs m	2,248	1,039	-53.8%
Total Revenues	Rs m	5,532	1,646	-70.2%
Gross profit	Rs m	1,568	16,925	979.6%
Depreciation	Rs m	1,059	411	-61.2%
Interest	Rs m	3,565	1,316	-63.1%
Profit before tax	Rs m	-808	16,238	NA
Tax	Rs m	3	-265	NA
Profit after tax	Rs m	-810	16,502	NA
Gross profit margin	%	47.7	2,789.7
Effective tax rate	%	-0.3	-1.6
Net profit margin	%	-24.7	2,720.0

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ESSAR SHIPPING Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 33 billion as compared to Rs 41 billion in FY22, thereby witnessing an decrease of -20.9%.
• Long-term debt down at Rs 4 billion as compared to Rs 17 billion during FY22, a fall of 76.3%.
• Current assets fell 4% and stood at Rs 9 billion, while fixed assets fell 35% and stood at Rs 990 million in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 10 billion as against Rs 12 billion during FY22, thereby witnessing a fall of 11%.

ESSAR SHIPPING Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	-49,144	-27,427	NA
Current Liabilities	Rs m	41,378	32,720	-20.9
Long-term Debt	Rs m	16,781	3,982	-76.3
Total Liabilities	Rs m	11,699	10,465	-10.5
Current assets	Rs m	9,839	9,476	-3.7
Fixed Assets	Rs m	1,525	990	-35.1
Total Assets	Rs m	11,699	10,465	-10.5

ESSAR SHIPPING Cash Flow Statement Analysis

• ESSAR SHIPPING's cash flow from operating activities (CFO) during FY23 stood at Rs 5 billion, an improvement of 266.1% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs 903 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -10 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 73 million from the Rs -90 million net cash flows seen during FY22.

ESSAR SHIPPING Cash Flow Statement 2022-23

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-22	Mar-23
Cash Flow from Operating Activities	Rs m	1,403	5,136	266.1%
Cash Flow from Investing Activities	Rs m	4,930	903	-81.7%
Cash Flow from Financing Activities	Rs m	-6,268	-9,689	-
Net Cash Flow	Rs m	-90	73	-

Current Valuations for ESSAR SHIPPING

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 79.7, an improvement from the EPS of Rs -3.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 18.1, stands at 0.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at -0.1 times, while the price to sales ratio stands at 6.2 times.
• The company's price to cash flow (P/CF) ratio stood at 0.1 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Sales per share (Unadj.)	Rs	15.9	2.9
TTM Earnings per share	Rs	-3.9	79.7
Diluted earnings per share	Rs	-3.9	79.7
Price to Cash Flow	x	6.3	0.1
TTM P/E ratio	x	-1.9	0.2
Price / Book Value ratio	x	0.0	-0.1
Market Cap	Rs m	2,423	1,846
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for ESSAR SHIPPING

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.3x during FY23, from 0.2x during FY22. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio improved and stood at 13.3x during FY23, from 0.8x during FY22. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company declined and down at -60.2% during FY23, from 1.6% during FY23. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company declined and down at -74.9% during FY23, from -8.5% during FY22. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company improved and stood at 170.3% during FY23, from 23.5% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Current ratio	x	0.2	0.3
Debtors’ Days	Days	3	8
Interest coverage	x	0.8	13.3
Debt to equity ratio	x	-0.3	-0.1
Return on assets	%	23.5	170.3
Return on equity	%	1.6	-60.2
Return on capital employed	%	-8.5	-74.9

To see how ESSAR SHIPPING has performed over the last 5 years, please visit here.

ESSAR SHIPPING Share Price Performance

Over the last one year, ESSAR SHIPPING share price has moved up from Rs 8.5 to Rs 18.1, registering a gain of Rs 9.6 or around 112.1%.

Overall, the S&P BSE SENSEX is up 16.1% over the year.

(To know more, check out historical annual results for ESSAR SHIPPING and quarterly results for ESSAR SHIPPING)