SCI plunges further into negative territory with US$10 million loss in fiscal Q1

SHIPPING Corporation of India remains in the red after recording a first fiscal quarter net loss of US$10 million, up from $1 million a year ago, mainly due to higher operating expenses and interest, despite overall revenue rising 28 per cent year-on-year to $230 million.

The state-owned ocean carrier posted a loss of $78 million in fiscal 2011-12, which ended March 31, compared with a $103 million profit the previous year.

For the three months to the end of June operating income grew by 22 per cent, with the company's core bulk shipping division recording an operating profit of $9.2 million on revenue of $155 million.

On the other hand, the company's container shipping division continued to suffer a loss with operating income falling $7.4 million into the red compared with $11.2 million for the same quarter a year earlier.

"The container shipping segment has shown some recovery in light of recent rate restoration initiatives on major trade lanes. We expect much improved results in the coming months," an unnamed senior official was quoted as saying in a report by The Journal of Commerce Online.

During the April to June quarter operating expenses surged 23 per cent year on year to $223 million, up from $181 million for the same period a year earlier. Bunker costs were up 40 per cent to $81 million.

The poor results come ahead of the scheduled delivery of 26 new ships that were ordered as part of a $4 billion fleet expansion programme.

In a related development, SCI earlier indicated that it plans to shut down Irano Hind Shipping Company, its joint venture with Islamic Republic of Iran Shipping Lines, a move prompted by the intensifying of US and European Union sanctions against Tehran.

Established in 1975, IHSC is 51 per cent owned by IRISL with SCI holding the remaining 49 per cent stake. Officials said negotiations were underway to divide the joint unit's fleet of seven vessels between the two partners.