Shreyas Shipping hosted a conference call on Aug 14, 2018. In the conference call the company was represented by Captain Vivek Kumar Singh, Managing Director and Rajesh Desai, CFO.

Key takeaways of the call

Capacity of 12 operated vessels in Q1FY19 was 21602 TEUs and including the one vessel (Ganga) that was on charter was 23143 TEUs. While SSL Ganga has come out from Charter and will be part of the operation of the company both SSL Krishna and SSL Balaji are both chartered out. So chartering out of Krishna (2490 TEUs) and SSL Balaji (671 TEUs) will cut down the operational capacity for own service by 3161 TEUs from total capacity of 24519 TEUs for the quarter excluding SSL Kolkata in Q2FY19.

During Q1FY19, one multipurpose vessel SSL KRISHNA was added in the fleet. Charter hire period of SSL Ganga was completed in end of June 2018 and she was deployed on the company's own service on East coast. SSL Kolkata caught significant fire after an explosion on 13th June in the cargo area of the vessel. All crew members were unharmed. The vessel is under salvage operation.

The volumes handled in terms of TEUs during the quarter saw an increase of 0.4% Q-o-Q and 6% increase Y—o-Y. Volume growth was under 1% in Q1FY19 to 115000 TEUS compared to about 114000 TEUs in Q4FY18.

Operational fleet capacity excluding chartered vessels has increased from about 16000 TEUs in Q1FY18 to about 21602 TEUs in Q2FY19 for the company but the volume growth has not witnessed such growth.

Utilization levels on all the services from North to South and West to East remained at the level of around 90% and on the reverse leg were around 65% during the quarter.

The average bunker rate for the quarter was Rs 30,500 resulting in increase in bunker cost by about Rs 6 crore. Exchange loss amounted to Rs 1.77 crore due to high volatile exchange rate fluctuation.

During the quarter two ports namely, Kandla and Bandar Abbas, were added in PIX 2 service. However, subsequently the services to Bandar Abbas were discontinued due to Iran sanctions.

EBITDA margin of 15-18% will be sustained for FY18.

Volumes in May, June and July was subdued. Slight increase in volume so far in August 2018. Once monsoon season concludes the volume will increase.

Only one dry docking is scheduled in current fiscal. SSL Brahmaputra (4273 TEUs capacity) is scheduled for dry docking during Q3FY19 with dry docked period being 14 days.

The company is able to pass on the incremental cost to customers in Feeder EXIM business as all the industry players have been impacted by rise in bunker prices. But the price increase was difficult in domestic market where it has to compete with Road fleet.

The company is also allocating tonnage in appropriate tonnage to improve utilization and pass on the cost to the customers.

Increase in capacity has not happened due to relaxation of Cabotage laws.

Container Corporation of India tender for coastal shipping vessels tender is currently under technical bid stage and the company has participated in the tender. Since CONCOR is intend to venture into multi modal logistics this will bring in additional cargo hitherto moved through rail and will only be additional volume for coastal shipping industry volume.

Including the company only four players are offering service on west coast and only two players on east coast.