Friday, May 25, 2018

Shreyas Shipping and Logistics Limited announces Audited Financial Results for the quarter and year ended 31stMarch,2018


Shreyas Shipping & Logistics Ltd, (hereinafter referred as ‘Shreyas’) a part of the 40-year-old global conglomerate Transworld group is an Indian ship owning and operating company with a prime focus on coastal container shipping and logistic services. Shreyas is a pioneer and market leader in containerised coastal shipping in India for both domestic and coastal Exim trans-shipment.

Shreyas is the largest container shipping company in India with a fleet of 13 vessels, 23143 Teus capacity, 315,722 DWT and 248,392 GRT, servicing 18 main ports in India and covers entire Indian coast and other regional areas.
Financial Performance for the year:.

Standalone revenues for the year 2017-18 stood at INR 544 cr as against INR 376 cr for FY17 which grew by 45%. EBITDA for FY18 is at INR 115 cr as against INR 50 cr during FY17 which grew by 123% and PAT stood at INR 81 cr as against INR 4 cr in FY17 which grew by 2205%. Considering share of profit of an associate and joint venture of INR 11 cr (net of tax adjustment), consolidated PAT stood at INR 92 cr for FY 18.

Global container shipping status:
The HRCI ended the first quarter of year 2018 up 19.5% from the start of the year and 19.7% higher than late March 2017.
Whilst the HRCI has been moving upward to reach 750 points by end March 2018, the SCFI (Shanghai containerised freight Index) has reduced by 20% since the start of the year and current level is at par with mid-2016.

Operational Highlights: 
Highlights of company’s contribution in the growth of containerized coastal shipping in India bringing growth in national fleet and coastal containerised volume even when faced with numerous challenges.
1.     Total containerised domestic cargo trade on the main land for the year 2017–18 was 195,000 containers as against 110,000 in 2015-16, with a growth of 77%. This corresponds to carriage and modal shift of cargo from land to sea mode as 5.85 million tons containerised cargo in the year 2017-18 as against 3.3 million tons two years earlier.
2.     SSLL’s domestic cargo trade of 109,766 containers in the year 2017-18 as against 59,521 containers in 2015-16 achieving a growth of 84%. This corresponds to carriage of 3.3 million tons containerised cargo in the year 2017-18 as against 1.8 million tons two years earlier.
3.     Shreyas handled total volume of 448,200 Teus in 2017-18 as against 331,000 Teus in the last year with a growth of 35%
4.     Besides handling containerised cargo, SSLL commenced handling coastal break bulk cargo in the 2ndhalf of year 2017 and handled 107,324 MT cargo during the year, mainly steel products of RINL and JSW, besides some project cargo. RINL commenced coastal movement of steel products for the first time venturing into modal shift from land to sea mode.
5.     Total coastal throughput at Indian ports was 1.5 million Teus in the year 2017 as against .85 million Teus in the year 2015 while SSLL’s throughput at Indian ports was 0.8 million Teus in the calendar year 2017 as against 0.45 million in 2015, achieving a growth of 78% in the two years. Growth of 90% in domestic throughput at Indian ports is indication of modal shift of cargo from land to sea mode while 55% growth in throughput of Exim volume is indication of shift of volume from foreign transshipment ports to Indian ports. Shreyas has contributed for the growth in coastal shipping on both fronts as envisaged by MOS. 
6.     To achieve the growth mentioned above, SSLL acquired 10 vessels including two multipurpose vessels of capacity totaling to 242,242 DWT and 18080 TEUS between 2015 and 2017, achieving a growth of 56% while there has been 17% CAGR increase in Indian flag container fleet from 2014 until 2017.
7.     Growth in seafarer’s employment from 2015 to 2017 has been 55 % in SSLL’s fleet. Indian shipping companies including us are training seafarers which is a big contribution to the Indian economy and providing employment to Indian seafarers. 
8.     18 major ports and container terminals in India were serviced during year 2017 by SSLL containers and break bulk coastal services on regular frequency, making 1060 port calls during the year.
9.     Indian shipping industry contributes Rs. 8000 Crores annually to the Indian economy while our company has contributed Rs.470 Crore in the year 2017-18 to the Indian economy.

Here we would like to highlight the myth regarding share of coastal shipping in over all transportation which does not seem to have changed in last many years while the growth story during last three years alone in containerised coastal segment as highlighted indicates a different story.
Another myth that if cabotage law is relaxed for Exim containers than foreign transshipment will shift to Indian terminals which is far-fetched, since the reason is not cabotage restriction but many other challenges like infrastructure and capacity constraints, high port costs, documentation procedures and largely depends on the network planning of the shipping lines. 
Based on this myth, MOS has issued General Order No. 1 of 2018 dated 21stMay 2018, which does not require a foreign flag container vesselto obtain a licence under Section 407 of the MSA to carry EXIM containers and empty containers on the coast.
The essence of this order is that there is no necessity to have an Indian flag vessel for the purposes of carriage of EXIM and empty containers between two Indian ports. While the outcome of this circular as envisaged by MOS will be seen in course of time, this may have setbacks for the Indian coastal shipping with respect to carriage of Exim transhipment containers. In the absence of a level playing field even Indian companies may consider flagging vessels outside India and operating on foreign trade, resulting our nation to lose opportunity of developing a transhipment hub port as well as growth in Indian tonnage which are important aspects for our nation.
The way forward: