Shipping Corp's numbers sink in Q1FY17

Government owned, Shipping Corporation of India has posted disappointing results in Q1FY17. In Q1FY17, net profit of the company has plunged by 72 per cent and stands at Rs 55.91 crores. EBITDA has also disappointed and stands at Rs 213.74 crores. Total income has fallen to Rs 875.94 crore in Q1FY17, from Rs 1,118.22 crore in Q1FY16.Shares of the company on Aug 19, have opened at Rs 71, down by 4 per cent. In the last 6 months shares have given a return of 22 per cent. 52-week High/Low stands at Rs 100/55.The shipping industry is cyclical and is presently experiencing a downturn, which is the major reason for such devastating results. The freight rates have come under pressure due to overcapacitisation of ships.

On the other hand, on Aug 3 company has entered into a Memorandum of Understanding with Government of India. The MoU majorly consists of parameters drawn on the prescribed evaluation criteria and factors such as capacity and its expansion, business environment and projects. Shipping Corporation of India was established on October 2, 1961, by the amalgamation of Eastern Shipping Corporation and Western Shipping Corporation. Starting out as a marginal Liner Shipping Company with just 19 vessels, the SCI has today evolved into the largest Indian Shipping Company. The SCI also has substantial interests in various segments of the shipping trade.