The Board of Directors of the Great Eastern Shipping Company
Ltd. (G E Shipping) today approved the Audited Results for the financial year ended 31 st March 2013.With respect to sale and purchase activities during the fourth
quarter of the 2012-13 fiscal year the Company sold and delivered its
1995 built Panama x dry bulk carrier ‘Jag Arnav’ to the buyers and
contracted to sell its 1988 built Genera l Purpose (GP) product carrier
‘Jag Parwar’ with delivery in Q1FY14.Subsequent to the quarter the Company delivered its 1988 built
General Purpose (GP) product carrier ‘Jag Parwar’ to the buyers and
contracted to sell its 1999 built Aframax crude carrier ‘Jag Leela’ with delivery in Q1FY14.The crude tanker market continued to underperform in Q4FY13. Subdued
demand from the western economies and seasonal refinery maintenance
added to tonnage oversupply reflected in lower earnings.The product tanker market echoed showed some strength on back of
robust demand of distillate cargoes from US to South American countries. Steady product demand from Asia also resulted in healthy cargo movement and utilization. But any meaningful rise in the charter rates was
capped by new addition of vessels in the market. The charter rates for
large asset classes in the dry bulk sector remained depressed throughout the quarter mainly due to lower iron ore imports from Brazil to Asia
and lower coal shipments from Australia due to heavy floods. Improvement in the grains exports especially from South America supported
utilization levels of smaller asset classes. Even though substantial
scrapping of vessels was witnessed, the issue of new supply overhang
loomed over the freight rates.On the other hand, when it comes to the outlook for the tanker
market, the International Energy Agency (IEA ) expects oil demand growth to remain muted for 2013 (0.9% to 90.6 mb/d) on the back of the
unstable European environment, US govt. spending cuts and weakening of
commodity demand from China. As anticipated, structural changes in the
trade patterns have already started showing their impact on the tanker
industry.With US turning net exporter of refined products, the product tanker
segment is expected to perform relatively better than the crude segment
in the coming years. But a recent boom in ordering of new product
tankers can negate a significant improvement in the charter rates going
forward.Dry Bulk MarketChina is likely to continue to focus on large scale infrastructure
development to achieve desired economic growth. India is also expected
to step up its coal imports to fire its mega power projects in the
medium term. All these factors reflect a steady demand growth for the
major bulk commodities. As a result of the difficult operating
environment, scrapping activities have increased and close to 7.5mn dwt
of dry bulk vessels got scrapped in Q1CY13. But looking at the current
supply issues, the industry requires massive scrapping to shorten the
demand supply mismatch.The revenue visibility for the balance part of FY 2013-14 is around
Rs.381 crores. Crude tankers and product carriers (incl. Gas) are
covered to the extent of around 42% and 56% of their operating days
respectively.In case of dry bulk carriers, they are covered to the extent of around 26% of the fleet’s operating days.During the quarter Greatship Global Offshore Services Pte. Ltd., a
subsidiary of GIL took delivery of a Platform/ROV Support Vessel,
“Greatship Ragini” from Colombo Dockyard Plc, Sri Lanka. Greatship
Global Energy Services Pte. Ltd., a subsidiary of GIL took delivery of a mobile offshore self elevating drilling rig, Le Tourneau 116(E) –
‘Greatdrill Chaaya’ from Lamprell Energy Ltd, UAE.In the fourth quarter of the 2013 fiscal year, oil prices witnessed
volatility within a range. However subsequent to the end of the quarter
oil prices along with other commodities corrected sharply. Disappointing economic data from US, EU and China has created some doubts on the
demand sustainability and therefore on the price of oil.Demand for offshore support and drilling services has remained
reasonably strong over the last few years, with oil prices still well
above the threshold for E & P profitability. However, with the wave
of new building deliveries expected primarily from yards located in
South East Asia and China, excessive capacity addition in the coming
years could cause some concern on utilizations and rates going forward.The revenue visibility for the balance part of FY 2013-14 is around
Rs.1,108 crores. PSVs and AHTSVs are covered to the extent of around 43% and 57% of their operating days respectively. ROVSVs and MPSSVs have
coverage of around 67% and 70% for the balance part of FY2014. In case
of Jackup rigs, they are covered to the extent of 86% of the operating
days.
MARKETS
06 May 2013 - 20:56
G E Shipping: Crude Tanker Market Continues to Underperform
The Board of Directors of the Great Eastern Shipping Company Ltd. (G E Shipping) today approved the Audited Results for the financial year ended 31 st March 2013.
MARKETS
06 May 2013 - 20:56
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