Varun Shipping has announced its FY08 numbers. It has posted FY08 net profit of Rs 225.8 crore as against Rs 141.3 crore and sales of Rs 937 crore.

Varun Shipping said the reported losses in Q4 were due to forex losses of Rs 62 crore. He said in FY09 USD 300 million will be invested over 7-8 months, which will improve profitability.

Excerpts from CNBC-TV18’s exclusive interview with Arun Mehta:

Q: Could you update us on your numbers? From a base of Rs 191 crore in sales, what have you delivered in Q4 FY08?

A: We have an improvement in our gross revenue as well as profit after tax, which has gone up by nearly 59%. That is an improvement from Rs 142 crore to Rs 225 crore.

Due to the improved earnings and profitability, we have increased dividend from 45% to 50%. So, dividend in the two interims stood at 15% each. We have declared a final dividend of 20%, giving a record 50% return or Rs 5 per share.

Q: What has been the net profit growth in the fourth quarter itself? Last Q4, you did about Rs 32-33 crore. What is the net profit and sales for Q4, how were the margins?

A: We have discontinued the practice of giving our quarterly numbers. We directly give our 12-monthly numbers. As far as the 12-monthly results are concerned, operating profit has gone up from Rs 141.50 crore last fiscal to Rs 225 crore this year. It is an improvement of Rs 59.73%.

Q: What are the revenues and net sales?

A: Revenue has also gone up to Rs 937 crore from Rs 724 crore.

Q: For FY09, what is the kind of growth that you are projecting on sales and profits?

A: For the coming year, we expect the market to be very positive. It is quite encouraging and this time we hope to improve this position from last time because we are likely to add some more assets. We have projected an investment of USD 400 million in the current calendar year, out of which nearly 25% has been already invested and the ships are ready to set sail. The balance 75%, which is around USD 300 million, will be invested in the next 7-8 months. We hope that will improve the profitability.

Q: Even if it is not incumbent under Sebi rules, what was the performance at the net level in Q4? By any chance, was it a loss or something?

A: The profit on gain of foreign exchange has gone a little negative compared to the earlier period. Otherwise, operating profits have been more or less continuing in Q4.

Q: What was the forex loss?

A: We have provided impairment because of the exchange disparity that had happened in the earlier period. We had to provide impairment for our two ships, assets of nearly Rs 12 crore, and have also taken a provision of Rs 50 crore for a further likelihood of the impact it could have in the current fiscal on account of the depreciation of the rupee. So, with that provision, we have provided Rs 72 crore in 12 months. Otherwise the profits would have been higher by that much.

Q: What about any possible mark-to-market, or MTM, losses? Did you have any positions on options, which might have led to MTM losses that you have to disclose?

A: We have not indulged in any derivative trading or future options, etc. We are playing by the market whenever the payments are due.