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Mercator held a conference call on May 24, 2013 to discuss the performance of the company for the quarter/fiscal ended March 2013. In the conference call the company was represented by Atul Agarwal, Managing Director, Capt. Kowshik, President (Shipping) and Prasad Patwardhan, CFO.
Key takeaways of the conference call
Net sales for the quarter was lower by 1% to Rs 1006.54 crore and the operating profit was lower by 17% to Rs 96.22 crore with operating margin contracting by 180 bps to 9.6%. Eventually at net profit (after Minority interest) level it was a loss of Rs 165.20 crore compared to a loss of Rs 24.30 crore in the corresponding previous period. Higher loss for the quarter on yoy basis is on account of impairment of Rs 87.91 crore (against nil in Q4FY12), higher loss on sale of asset about Rs 11.17 crore, lower forex gain (down 94% to Rs 1.93 crore) and exceptional item (up by 13.04 crore).
For FY2012-13 the consolidated sales was up by 1% to Rs 3733.35 crore and the operating profit was lower by 13% to Rs 505.95 crore with its OPM contracting by 220 bps to 13.6%. Eventually the net profit (after MI) was a loss of Rs 372.09 crore compared to profit of Rs 20.56 crore in FY12.
Asset class-wise TCY for FY13: It is USD 12470 for dry-bulkers, USD 16520 for tankers, USD 9140 for dredgers and USD 120600 for offshore.
Coal business volumes for FY13 were about 7.6 mln metric tonne. The company looks at a coal volume of 9 mln metric tonne in FY14.
Both tanker and dry bulker market is weak. Going forward the market looks to continue to be weak, but the good part is the order book is diminishing. And asset prices are not going down further. S&P prices are starting to stabilize or even showing small mark up in some segment. Challenging days are there and they will continue for some time. People think the bad days are over and this is the point the turnaround to start. Now people believe that they can tide over the time.
The company just purchased a handy tanker and put it on long time charter for a domestic oil company.
Except VLCC, all tanker tonnage is currently deployed on time charter. The first renewal opens up in Nov 2013 and the next opening happens only in next year i.e. June 2013 & August 2014. All product tankers of the company are deployed with Indian oil companies.
Start drilling wells in Cambay basin exploration block by latter this year. Capex incurred so far in oil blocks is Rs 25 crore.
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