India's SCI Swings to $28 Million Loss

State-owned Shipping Corporation of India swung to a $28.12 million loss in the fiscal second quarter ending Sept. 30, from a $50.13 million profit a year earlier, as higher fuel costs and less ship demolition business pulled down earnings.

SCI’s revenue increased 1.5 percent in the July-September quarter from the same period last fiscal year to $207.5 million.

“The major contributors to the second-quarter loss were much higher bunker costs, at $74 million from $33 million a year earlier, and a substantial reduction in income from disposal of ships, at $4 million from $25.6 million,” the company said.

Despite a marginal increase in revenue, the national carrier’s liner division reported a loss of about $300,000 in the three-month period, compared with a $7.4 million operating profit in the same period last fiscal year.

SCI’s core bulk shipping business slumped to an $8.7 million loss from a $33.5 million operating profit a year earlier. Operating income from bulk operations dropped to $128 million from $134.6 million.
SCI's operating expenses for the second quarter totaled $213 million, up 37 percent from $156 million a year earlier.

From April through September, the first six months of fiscal 2011-12, the carrier lost $29.3 million compared with a $90 million profit a year earlier. Revenue for the first half grew 2 percent year-over-year to $403 million.

The second consecutive quarterly losses come as the company tries to raise funds for 26 vessels of 1 million deadweight tons on order with deliveries scheduled between 2012 and 2014.

SCI, India’s largest ocean carrier, currently has a fleet of 81 vessels with a total cargo-carrying capacity of about 5.82 million dwt. For fiscal 2010-11 ended March 31, the company reported net profit of $126 million, up 50 percent from $84 million the previous year.