State-owned Shipping Corporation of India is scaling back its fleet expansion plan after suffering two consecutive quarterly losses.
Indian Shipping Minister G.K. Vasan said the national carrier will buy 46 new vessels by the end of 2012, compared with original plan to acquire 62 ships between 2007 and 2012. The ministry in October denied reports that it directed the carrier to pull back on fleet expansion plans.
"The Shipping Ministry is reviewing the overall performance of SCI including its financial performance regularly and the company has been advised to exercise utmost care in financial matters in view of the current downside,” Vasan said.
He said the company has placed orders for 39 of the 46 vessels, and orders for the remaining 7 ships will be placed by the end of 2012.
“The shipping industry is in a recessionary phase and freight rates are at the lowest level in all segments, which adversely impacted SCI’s financial performance in the first six months of fiscal 2011-12,” Vasan said.
SCI, the country’s largest shipping line, currently has a fleet of 81 vessels with a total carrying capacity of 5.82 million deadweight tons. The carrier lost $28.12 million in the fiscal second quarter ending
Sept. 30, compared with a net profit of $42.5 million a year earlier.
For fiscal 2010-11 ended March 31, the company posted net profit of $126 million, up 50 percent from $84 million the previous year.