In the same period a year earlier the company had posted net profit of . 135.85 crore. Rise in crude oil prices increased fuel cost and higher commodity prices reduced overall commodity trade volumes weighing on margins. Operating margin declined to 11.6% from 17% a year ago. Surge in interest cost and depreciation, fall in other income, and increase in effective tax rate dented fourth quarter earnings.
For the year ended March, the company reported net sales of . 3,543 crore, up 2.3% from corresponding period a year earlier. Net profit was . 567.35 crore, up 50% from a year ago, helped by robust operating margin of the first three quarters. In fiscal 2010-11, SCI raised about . 2,600 crore through a combination of equity and debt to fund fleet expansion.
The company's fleet size was 79 with total capacity of 5.73 million dead weight tonne as on March 31, up 27% from a year ago. The company plans to raise $500-600 million through external commercial borrowings to fund fleet expansion. This will increase its debt-to-equity ratio to 0.95. It is currently trading at price-to-book value of 1.05 which is higher than its 15-year average of 0.78. However, its valuation in terms of price-to-earnings multiple at 7.6 is lower to than industry average of 12.
Shipping freight rates have fallen drastically since the global financial meltdown of 2008. This is reflected in the Baltic Dry Index, the benchmark for freight trade, which plummeted from a record high of 12,000 points post 2008 financial crisis.
The index, which measures the rates for chartering of carriers, fell 50% in January-March compared with a year ago, the lowest in past two years.
The company expects growth in foreign trade in the coming quarters to improve freight rates. Global economic recovery and improvement in trade volumes will be key for the company's performance going ahead.
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