Seamec sees better oveseas biz pricing; eyes spending cuts

CJ Rodricks, MD of Seamec said the company’s overseas business is witnessing better utilization of vessels. He expects utilization to continue at current levels. “We are seeing improved pricing in our overseas business,” he told CNBC-TV18 in an interview.Seamec has reported a standalone sales turnover of Rs 126.40 crore and a net profit of Rs 30.27 crore for the quarter ended December 2013. Other income for the quarter was Rs 0.42 crore. For the quarter ended Dec 2012 the standalone sales turnover was Rs 86.87 crore and net profit was Rs 4.73 crore, and other income Rs 7.64 crore.Rodricks attributed the improvement in revenues to higher development of vessels. “We are focusing on reducing expenditure going ahead,” he said. Below is the transcript of CJ Rodricks interview to CNBC-TV18’s Nigel D’Souza and Reema Tendulkar. Reema: Can you sustain this 45 percent revenue growth that you have seen in Q3 as well as operating margins at 30 percent in the coming few quarters?A: What has happened is that the company has dry docks in the past few couple of quarters. So our results were not that good. We have got all our vessels working and I am hopeful that if we can continue like this then we should be able to do pretty good.Nigel: Can you break up your overseas business as well as your domestic business for us? Overseas business seems to have seen a big jump, are you seeing good amount of traction on that front?A: We see a slight increase in rates for our overseas business. Secondly, we have had better utilisation on the vessels placed overseas. So that has been a big positive. In India, we have also got all our vessels working that are based here. I don’t have the figures right in front of me. We hope that we can keep utilisation up. We should able to sustain our performance.Nigel: This quarter has been very good. But for nine-month ended FY14, we are still in the red. So it is a loss of around Rs 29 crore for the nine-month ended. If you replicate this performance in Q4, do you think you can breakeven for the year itself?A: We shall definitely try to be positive for the year. Of course, we can try and do our best to at least breakeven.Reema: You said this quarter you had a couple of vessels, which were stationary and now they have gotten deployed and that aided the performance in Q3. So that trigger has already played out. What can drive such strong growth in the coming two quarters? Will it just be a continuation of the utilisation? Can you improve your utilisation further to sustain this kind of a 40-50 percent revenue growth?A: The utilisation has got to stay as it is right now and if possible we have got to cut expenses, we would have chance of cutting expenses to try and make up the fiscal year deficit so to speak and also try and increase our rates. We have got vessels bid out at rates which are slightly higher than what we have. So if we can manage all that together then we should able to do better than what we ourselves expect.