Essar Shipping Ltd (ESL), on Wednesday, reported a strong operational performance with a 22 per cent growth in cargo handling in FY2016-17, compared to the previous fiscal.

During this period, the company’s 14-vessel fleet also grew its capacity utilisation from 80 to 94 per cent. The Baltic Dry Index, a key indicator of freight rates, has also gone up by four times during FY16-17 — from an all-time low of 290 (in February 2016) to a high of 1,300 (in March 2017), the company said in a statement here.

In FY17, ESL carried dry bulk cargo of almost 11.5 million tonnes (mt), as against 9.4 mt in the previous financial year. More than 80 per cent of its fleet carries dry bulk cargo, which includes products such as iron ore, coal, bauxite and limestone, Ranjeet Singh, Executive Director and CEO, said.

ESL’s two VLCCs — MT Smiti and MT Ashna — are used for crude oil transportation and are employed on spot contracts to take advantage of volatility in crude oil prices.

A highlight of the FY17 fiscal was the doubling in coastal cargo movement triggered by the increased capacity utilisation at Essar Steel, which is among ESL’s key customers. The company also benefitted from a considerable growth in backhaul cargo, both on the east and west coasts of India, because of the all-round growth in Essar Steel.

Singh said the strategy to have an ideal mix of captive and market cargo has ensured better utilisation of vessels in FY17. The stronger Baltic Dry Index, coupled with increased activity and capacity utilisation at Essar Steel, had also had a positive impact on our toplines. “Almost half of our fleet is currently engaged in coastal movement.”

ESL operates a diversified fleet of 14 vessels, including VLCCs, capesizes, mini-capesizes, supramaxes, handysize bulk carriers, and mini-bulk carriers. A sizeable part of the capacity is deployed using an optimal mix of spot markets, long-term contracts and COAs, maximising profit and insulating the company from volatility.

The oilfields services business provides contract drilling services to oil and gas companies across the globe. This business owns one semi-submersible rig and 15 land rigs.