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Last Updated : Nov 17, 2016 01:10 PM IST | Source: CNBC-TV18

SCI hopes for better Q3 on strong tanker segment, expansion plan

In an interview with CNBC-TV18, Anoop Sharma, Chairman and MD of SCI, said the second quarter of this financial year was weak due to the decline in the earnings of the tanker segment. The offshore fleet was also not utilised due to the monsoon adding to the losses in the second quarter.

Shipping Corporation of India (SCI) posted standalone net loss of Rs 20 crore for the second quarter ended September 30, 2016-17.

In an interview with CNBC-TV18, Anoop Sharma, Chairman and MD of SCI, said the second quarter of this financial year was weak due to the decline in the earnings of the tanker segment. The offshore fleet was also not utilised due to the monsoon adding to the losses in the second quarter.

He hopes that the third quarter will see better results with the winter setting in. The tanker segment will be stronger.

He further said the current quarter is seeing good earnings from the tanker segment.

The company has expansion plans worth Rs 900 crore this year. It is going to buy second hand vessels and has picked up two offshore vessels. He expects this will bring up the revenue.

Below is the verbatim transcript of Anoop Kumar Sharma’s interview to Prashant Nair and Reema Tendulkar on CNBC-TV18.

Reema: Q2 was weak, has the situation improved for you in the current quarter or has demonetisation made things even worse for you?

A: The Q2 has been not very good for us because it has been down market in the tanker segment and most of the earnings which has been there in the first quarter of the tanker segment has not been there in Q2 and we have done the revenue of Rs 759 crore and the loss of about Rs 8 crore after tax in the current quarter and it is mainly due to decline in the tanker fleet. Tanker earnings and in offshore segment which has been there due to monsoon which has been there due to monsoon which has been unemployed for some time and after monsoon we look forward that both the segments will come up due to winter and post monsoon.

Reema: On tanker fleet which you said was especially weak this time what was the decline in volumes and were you hit on account of realisations as well?

A: On account of the freight markets or the tanker the first quarter were good and second quarter has been quite weak and now with winter setting in all over the movement has been nice and we see good results in the next quarter which is coming up. Also for the offshore segment as you know in the Bombay High offshore area monsoon the construction work is not there. Therefore the offshore fleet was not well utilised. After the monsoon this fleet also gets into action and where we start earning more money and the next quarter should be seeing. These are the two segments which has been weak in the last quarter.

Prashant: Business has been weak. For a while, structurally things don\\'t seem to be picking up. As you said winter is approaching. You might see a bit of a bump up because of that in one segment but what is your overall perspective. Do you see any change in scenario in terms of the number of vessels there, capacity being utilised etc. Structurally are things anywhere close to actually turning around?

A: As you can see the BDI is going up now, it has just crossed the 1000 mark and people have started earning just about Organization of the Petroleum Exporting Countries (OPEC\\'s) money in terms of bulk arrears. In terms of offshore sector it will continue to remain weak. We expect the tanker market to be little strong during the winter period. Going forward we will see these three segments in at least next two quarters to be a little stronger and it will all depend on what happens of the US towards Iran policy. Then we will see the markets for bulk as well as the tankers going in a different direction.

Prashant: For the full year could you give us some estimates, what kind of total volume growth numbers will you see? Will you see growth over last year or it seems tough?

A: It is tough but we will try and make it, the same numbers like last year. That is what is the expectation. With expansion plan we have got Rs 900 crore expansion plan in this year. We are going to buy second hand vessels and we have already picked up two offshore vessels and next one line is tanker and LNG. So, that is going to add up to our fleet and that will bring up the revenues for the corporation.

Reema: When you say winter season will be better, can you quantify what better means?

A: It will be much better in terms of tanker segment which is our main fleet. If you see the 40-50 percent of the fleet of SCI is - major fleet is tanker fleet and the earnings we are seeing in winter season for this quarter is good and it is going to be much better than first and second quarter.

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First Published on Nov 17, 2016 12:53 pm
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