Income from operations (including freight earnings and charter hire charges) went up by around 3.2 per cent from Rs 82.2 crore to Rs 84.97 crore. Other income stood at around Rs 3 crore as against Rs 20.3 crore (included around Rs 17.8 crore profit on sale of a vessel) in the previous year.

The company, which has a fleet of 12 bulk carriers, has been hit by the drastic fall in freight rates. "The baltic freight index (BFI) which was ruling around 1600 two years back has plummeted to 869 in the last week", company sources said. "The BFI has killed the company", the sources added.Total expenditure, which includes a loss of Rs 50 lakh on sale of a ship was pegged at around Rs 59.2 crore (Rs 49.8 crore). Interest outgo during the year shot-up substantially to around Rs 26 crore (Rs 15 crore).

According to sources, the company proposes todispose of at least two vessels in the current fiscal. "The vessels will be sold only if the company gets a good price", sources clarified.

The general slackness in the shipping industry worldwide and the south-east Asian crisis has brought down the rates of the second hand and new vessels.The second-hand market for a medium-sized bulk carrier which would have fetched around $10 to $12 million, now fetches hardly $7 to $8 million. The cost of a new bulk carrier of the same size would come to around $20 million, sources added.

As the company has a huge interest burden, Chowgule Steamships has not proposed to acquire any vessels in the current fiscal. "The prices of new ships are very tempting but given the burden of forex loans we cannot go in for more acquisitions," sources said. The company hopes that the freight rates will improve after six months once the international safety management (ISM) code comes into force. The code enacted by the international maritime organisation (IMO) will force severalold vessels out of service.

Reflects shipping industry's state

The beleaguered state of the shipping industry is amply reflected in the results of Chowgule Steamships. Operating profits have reduced by 20.54 per cent to Rs 25.75 crore. Commensurately operating margins have fallen to 30.30 per cent from 39.41 per cent. This is attributed to dry bulk cargo rates and charter rates hovering at very low levels. Moreover, the company incurred a loss of Rs 50.04 lakh on the sale of a 19-year-old ship.

Incidentally, the company had incurred repair charges of around Rs 1.25 crore on the concerned ship. A loan amounting to $42 million from IFC was also responsible for increased interest outflow. All this has translated into a huge loss of Rs 21 crore. But it has to be noted that a Rs 16 crore profit was posted in the previous year due to an inflow of Rs 17.85 crore on account of sale of a ship.