A weak tanker segment and high crude oil prices weighed on the Shipping Corporation of India’s (SCI’s) EBITDA for the first quarter ended June 30. The company’s liner and bulk segments, however, performed well.

Harjeet Kaur Joshi, Chairman and MD, Shipping Corporation of India, discussed the earnings, divestment and outlook of the company with CNBC-TV18. Joshi pointed to container shortage, however, asserted that it is not as bad as a few months back. She said that the situation is improving because of double vaccination taking place in most countries, which she said, is now catching even in India. This had led to a turnaround at the ports and movement of the MPs is improving and curtail the shortage to an extent, she added.

Although the shortage continues, it does not affect SCI because it has inventory, which the firm is able to manage in an efficient manner. The company is ensuring that the turnaround of the MPs gets circulated in time to pick up the cargo and so it is going full capacity on its container business, Joshi explained.

The container business segment contributes to 18-20 percent of SCI’s revenue and though it is a small segment, it has given the company a lot of profit in the quarter gone by, she added.

Talking about the fundamental decline in revenues, she said “we are basically a tanker oriented company with 32 vessels in that segment, which is the largest segment that drives SCI. The current tanker indices are at all-time low.

She said that this is the worst time for any shop owners since the Dirty Tanker Index, which was 1421 in December 2019, is currently down to 598 level and the Clean Tanker Index which was at 1305 in April 2020, is down to 473. She added that the trend is expected to continue.

Therefore, because of the tanker segment, there has been a drop in the topline. Moreover, the tanker segment in this quarter and the previous one reported losses because freight indices are also at an all-time low and crude prices are simultaneously rising, Joshi explained.

Joshi doesn’t expect the tanker segment to report profits at least for the immediate next quarter. She said that the firm, however, is hopeful of improvement in Q3 with winters approaching as there is an upsurge of gas consumption in the west during winters. FY22 is not going to be good for the tanker segment, she added.

For the full interview, watch the video

(Edited by : Kanishka Sarkar)

First Published:Aug 11, 2021 3:22 PM IST