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Garware sees improvement in offshore market

Published on Tue, Oct 20, 2009 at 17:14 | Source : CNBC-TV18

Updated at Tue, Oct 20, 2009 at 18:12

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Sandeep Akolkar, President Finance , Garware Offshore

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Garware Offshore has announced its Q2FY10 results. Its consolidated net profit went up to Rs 6 crore versus a loss of Rs 15 crore on a quarter-on-quarter basis.

The company's President Finance Sandeep Akolkar told CNBC-TV18 that he sees an improvement in the offshore markets. "The demand for offshore service is picking up and it will further go high."

Here is a verbatim transcript of an exclusive interview with Sandeep Akolkar on CNBC-TV18. Also watch the accompanying video.

Q: Please tell us about your numbers both in profits and sales for this quarter?

A: The sales on consolidated basis have gone up by 11% compared to the previous quarter of the corresponding year.

Q: What does it translate by way of numbers, in rupees?

A: This is by way of percentage, compared to Rs 49 crore it is up to Rs 54 crore this quarter. Profit for this quarter is at the net level. It has come down a little bit, it was 30.6% in the previous quarter is has come to 12% in this quarter. he main reason for this is in this quarter particularly what has happened is two of our vessels which were in the small anchor in the Asian waters came off contract for almost two weeks and other two which are working in the spot market, the charter rates have come down, so this is the reason why the top line has come down a bit and also one of the vessels was under dry docks which we had to do in this quarter. So these are the reasons why our top line is comparatively less to that of a previous quarter but looking forward we are looking at some long term contracts and two vessels which came off contract from the Asian waters have again started their work.

Q: Could you also tell us about the margins at this point in time and what about the entire offshore service, how the demand is looking at this point considering you have seen a slight dip in your bottom-line?

A: The demand is again picking up, it had gone down substantially but now again we are seeing the market going up and it will slowly go up in the times to come and now with NELP VIII also being declared. So the offshore market seems to be good. As far as the margins are concerned, in this quarter they are a bit low but the reason is because of the top line being gone down plus we took the delivery of two assets this quarter. One of them have also started earnings in the Asian waters, a barge and other is a small anchor handling tug which is working in the middle east.

Q: What were day rates at an average in this quarter? What do you expect them to hold by a range in the next quarter, the quarter under way?

A: From the small tug, day rates are in the range of USD 8,000-10,000 per day and for the barge its between USD 30,000-32,000 per day and for the PSV, we are earning at an average in the spot market between SUD 6,000-9,000 where as the PSV working in the term contracts are earning between USD 16,000-18,000.