Over the first quarter of the 2019/20 financial year, ending June 30th, the Shipping Corporation of India (SCI) achieved significantly improved financial results compared with the equivalent period in the previous year. The company’s consolidated income was up to RS 968.23 crores (US$ 134.96 million), from RS 913.09 crores (US$127.27 million) in the first quarter of 2018/19. Consolidated losses narrowed from RS 190.39 crores (US$ 26.5 million) to RS 28.90 crores (US$ 4.02 million) in this period.
Chairman and managing director, Captain Anoop Sharma, says, “This quarter was considerably better than the first three months of the last financial year because we were able to secure improved charter hires for our ships, and to have more operating days. Greater operational efficiencies have led to a much improved EBITDA margin as well.”
He continues, “Overall our performance over these three months was highly encouraging and was led by good results in the tanker sector, while dry bulk and offshore also did well. The one disappointment was the liner shipping business where the outcome was not so good.”
Looking forward to the rest of the 2019/20 financial year and beyond, Sharma is upbeat. “We expect these positive trends will continue, especially with regard to the tanker and dry bulk sectors which account for around 60% of our revenues,” he says. “I believe that 2020/2021 will be a turnaround year for shipping generally, as reduced newbuilding levels and more scrapping reduces overcapacity and improves the supply side. SCI stands to benefit from this.”
Current challenges for SCI include the impending IMO 2020 sulphur cap. In this context SCI has recently taken an important strategic decision, opting not after all to install exhaust gas scrubbers on its ships, but instead to utilise lower sulphur fuels. The general slowing of global GDP, the effects of the US-China trade war and US sanctions against Iran are all also impacting on SCI activities, Sharma points out.
SCI has a diversified business and is active in most shipping sectors. For the next few years the focus in terms of business development is likely to be on the Indian coastal and inland waterway markets. Over the past 18 months SCI has introduced two new coastal liner services: The Port Blair Service connecting Chennai-Kolkata-Port Blair and the East Coast of India Express Service which operates between Kattupalli, Krishnapatnam, Haldia, Paradip and Visakhapatnam. SCI also now has a dedicated subsidiary, Inland & Coastal Shipping Limited, to capitalise on emerging opportunities in the inland waterway business. “The plan is to offer multipurpose inland waterway services, including ro-ro, in line with Government strategy,” adds Sharma.
Sharma will step down from his post on September 11th after three years at the helm of India’s biggest shipping company, having been recruited from the private sector, following a spell as managing director of Essar Shipping.
Sharma reflects on a number of achievements during his time in charge at SCI. He says, “We now have a distinct strategy for expansion with processes in place to acquire second hand tonnage, and not to rely only on newbuilding orders. We can also now take part in auctions, bidding for the assets we require as they become available.”
Over the past three years Sharma has been able to ‘clean up’ a number of problems that were holding back the company, and all outstanding issues with charterers, suppliers, unions and other stakeholders have now been satisfactorily resolved. Sharma adds, “I am particularly proud of the many employee engagement programmes we have put in place as employees are a key strength of SCI. If they are engaged, then they deliver.”
As yet Sharma has no firm plans for the future, but he says he does not expect to be idle for long. He concludes, “I have greatly enjoyed my time at SCI, and I am immensely proud of what we have achieved over the past three years. I hope to continue to be involved in shipping, as with my experience of leading both state owned and private companies, I have something unique to offer this industry.”