Essar Shipping on Thursday reported a net profit of Rs 54.98 crore in the quarter ended March 31, 2012, as against a net loss of Rs 0.67 crore in the year ago period.

This was mostly on account of its strategy to deploy its entire shipping fleet on long term contract to counter the subdued freight rates in the spot market.

Also, its drilling business contributed significantly to the company's revenue.

It's revenues during the quarter were up 24 per cent at Rs 845.20 crore (Rs 683.92 crore).

Oilfields services revenues increased 60 per cent to touch Rs 147 crore during the quarter, as against Rs 92 crore in the year-ago period.

“The shipping industry, this year, faced several challenges, but we have been relatively better off given our presence in oilfields services (offshore and onshore drilling) and logistics,” Mr A.R. Ramakrishnan, Managing Director, said.

The shipping market has been damp for most of the year, although in the tanker segment, especially in the very large crude carrier, the rates nudged up a bit in the last few weeks.

Sees More biz for tanker fleet

“Things should continue to move towards better proposition in this year. As crude procurement shifts from the Middle East to Latin American countries, I see more business for the tanker fleet going forward,” he said.

Drilling segment

In the drilling segment, Essar Shipping recently bagged orders for two of its land rigs from Brunei and an Indian company for a total of $25 million.

“Our semi-submersible Wild Cat rig is on contract in Indonesia at $2,85,000 a day, which will continue for another 12 months. We see opportunities for the contract to go beyond that also,” Mr Ramakrishnan said.

Essar expects a margin of over 70 per cent in terms of EBIDTA for the semisubmersible rig and about 55-60 per cent for the other land rigs this fiscal.

amitmitra@thehindu.co.in

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