Brickwork Ratings assigns BWR AAA+ for The Great Eastern Shipping Cos non convertible debenture issue of Rs 250 cr

Written by Agencies | Bangalore | Updated: Aug 26 2009, 17:19pm hrs
Brickwork Ratings has assigned BWR AAA+ (Pronounced BWR Triple A Plus) for The Great Eastern Shipping Co. Ltd.s (G E Shipping) proposed Unsecured Non Convertible Debenture (NCD) issue of INR 250 Crore or INR 2.5 billion of ten year term. Brickwork Ratings BWR AAA+ stands for an instrument that is considered to offer BEST credit quality in terms of timely servicing of principle and interest obligations. The rating factors economies of scale, revenue characteristics, operating efficiency, return on capital and excellent management.

GE Shipping has consistently posted strong growth in total shipping business. For FY 09 on a consolidated basis, income from operations increased at a rate of 14% to INR 4123.93 Crores as compared to INR 3615.4 Crores in FY08. However the Companys profit after tax decreased slightly to 3% from INR 1407.7 Crores in FY09 as compared to INR 1453.51 Crores in FY08 mainly due to increase in operating expenses to INR 2061.04 Crores in FY09 from INR 1616.6 Crores in FY08. The Companys Net current assets increased 49% to INR 1615.73 Crores in FY09 from INR 1080.62 Crores in FY 08.

In FY09, G E Shippings tanker business accounted for around 67% of the net revenues and 59% of the operating profits. The companys tanker earnings derived from spot market was 64% in FY09. The crude tankers, including spot and period, earned an average Time Charter Yield (TCY) of $ 41200/day in FY09 as compared to $ 300000/day in FY08. The product carriers, including spot and period, earned an average TCY of $ 23700/day in FY09 as compared to $ 20250/day in FY08.

The company had a tanker fleet of 31 tankers aggregating 2.38 million dwt, with an average age of 9.9 years as on 31st Mar 2009 as compared to 33 tankers aggregating 2.35 million dwt with an average age of 10.53 years in 31st Mar 2008. In FY09, the companys dry bulk fleet business contributed 33% of the net revenues and 41% of the operating profits. The dry bulk vessels, including spot and period, earned an average TCY of $ 39800/day in FY09 as compared to $ 38400/day in FY 08.

In FY09, second-hand value for modern and older tankers witnessed a drop of 40-60%, while modern and older dry-bulk carriers saw a drop of 60-80%.

The companys dry bulk fleet stood at eight vessels aggregating 0.50 million dwt, with an average age of 13.3 years as on 31st Mar 2009 as compared to 13 vessels aggregating 0.72 million dwt with an average age of 14.48 years in 31st Mar 2008. The Companys order book comprises of nine new vessels aggregating 0.92 million dwt, in crude, product and dry bulk carriers segment and expected to be completed in 2011.