Description
This is a documentation is about company analysis of Shipping corporation of india.
Shipping Corporation of India Ltd.
Company Analysis :
1. Brief description
The Shipping Corporation of India was established on October 2nd, 1961, by the amalgamation of Eastern Shipping Corporation and Western Shipping Corporation. SCI is headquarted at Mumbai . Starting out as a marginal Liner shipping Company with just 19 vessels, the SCI has today evolved into the largest Indian shipping Company. The SCI also has substantial interests in various segments of the shipping trade. SCI?s owned fleet includes Bulk carriers, Crude oil tankers, Product tankers, Container vessels, Passenger-cum-Cargo vessels, Phosphoric Acid / Chemical carriers, LPG / Ammonia carriers and Offshore Supply Vessels. Sailing through for nearly five decades, the SCI today has a significant presence on the global maritime map. SCI has been servicing both national and international trades.
The SCI is today the only Indian shipping Company operating: break-bulk services, international container services, liquid/dry bulk services, offshore services, passenger services. The SCI has immensely contributed to the growth of India?s EXIM trade and the national exchequer, by being a net earner/saver of valuable foreign exchange.
As a profitable commercial venture of the Government of India, the SCI has an excellent track record of profitability since its inception. The SCI?s annual performance has consecutively been rated excellent for a record 18 times, under the Memorandum of Understanding (MoU) signed with the Government of India.
Liberalization and globalization of the Indian economy has presented the SCI with a suite of growth and diversification opportunities. The SCI?s growth has been additionally spurred on by the presence of a modern, young and diversified fleet, operated by a large pool of well
trained and experienced manpower, both onshore and at sail. The Government of India has conferred “Navratna” status to SCI on 01.08.2008 - enhanced autonomy and delegation of powers to the Company towards capital expenditure, formation of Joint Ventures, mergers, etc.
Continued profitability of the SCI is been due to a slew of innovative and timely strategies and measures adopted by the SCI management. Amongst these include, inter alia, judicious and optimal utilization of available tonnage, by deploying it in the most remunerative sectors; commencement of new services in niche markets; identification and expeditious disposal of value destroyers or non-performing assets; forging alliances with leading market players to enhance cargo; availability and apportioning of expenses; and administrative cost cutting.
Thrust areas for growth and diversification focus on energy transportation, including a sunrise segment like transportation of LNG and containers. The SCI forays into new thrust areas could either take the form of direct capital investment or by forging strategic and symbiotic alliances with significant market players in the market. The SCI has heralded India?s entry into the specialized field of LNG transportation, by acquiring a stake in the two Indian LNG transportation agreements contracted till date, after a global bidding process. SCI is the only Indian shipping company engaged in transportation of LNG, a vital fuel for India?s power plant and chemical / petrochemical industry. For the same purpose, SCI has formed three Joint Ventures with one vessel each. On two of these LNG vessels, SCI is managing onboard operation and technical management and the remaining vessels is fully manned by SCI. The SCI possesses all the ingredients essential for emerging as a truly world class international shipping Company. The endeavour of the management is to facilitate the release of boundless energy and initiative streams, which will be channelled for the growth and prosperity of the Company and the nation.
The Bussiness level SWOT analysis is
Strengths: As per the recent forecast by the National Council of Applied Economic Research (NCAER), the average GDP growth for 2011-12 is reckoned at around 8.5%, at nearly the same level as in 2010-11. . The cargo traffic at the Major ports is expected to increase to around 615 million tons in 201112 i.e. a growth of around 8% over the previous year?s level. India?s exports surged to a record high growth of 37.6% in 2010-11, as global demand soared for engineering goods, oil products and gems manufactured in India, Asia?s third-largest economy. Exports were at $245.9 billion for the year, while imports rose 22% to $351 billion. The total cargo traffic at the Major Indian ports in 2010-11 was 569.91 million tonnes (mt.), with the traffic growthdeclining to 1.57% from 5.8% in the previous year. This sharp fall in the growth has been attributed to various factors: Ban on iron ore exports (which resulted in reduced traffic at New Mangalore, Paradip, Mormugao and Ennore ports) Many planned power projects that would have resulted in considerable coal traffic remained sluggish; consumer product exports too were slack.
Opportunities and Threats: The World economy is projected to grow at a slower rate of 4.2% in 2011, down by nearly 1% from the previous year?s rate. It is expected to improve marginally in the next few years with growth picking up to 4.4% in 2012 led by China and „Developing Asia? (excluding China) with 9% and 6.4% GDP growths, respectively. Subsequently, the world economy is projected to slow down slightly to an average 4.3% p.a. from 2013 to 2015.
Indian shipments to China would lose market share to the long-haul Brazilian supplies. The average distance of Chinese steel products exports is also likely to increase modestly. On the Fleet side, the dry bulk fleet is expected to grow by 14% in 2011, followed by 9% growth in 2012 and thereafter the growth is projected to average 5% per year upto 2015.
In the Oil segment, with strong demand expected to emerge from Asia, the overall Oil trade demand is projected to grow by a little over 3% in 2011, almost the same rate as witnessed in 2010. Crude oil trade is likely to grow by 3% and refined Product trade by 4%. Upto around 2013, in view of the lost production of crude oil in Libyan, the long-haul shipments of crude oil to North America, China and Europe are expected to increase and contribute significantly to shipping demand. However, subsequently, due to rising pipeline imports in China and slower oil consumption growth in most regions, the impact of such long-haul shipments is expected to reduce.
The Product trade is expected to experience a higher growth with Europe increasing its refined product imports, higher US exports to Latin America, and higher Japanese imports of fuel oil. Thus, for the period from 2012 to 2015, both Crude and Product trade demand is reckoned to grow at an average annual rate of 3%. On the Fleet side, the Tanker fleet is expected to grow by 5.1% in 2011 and 5% in 2012, followed by slower growth in the coming years. In the Container segment, global trade growth is expected to slow down to 7.6% in 2011 and then pick up in 2012 to 10.1% with domestic demand in Asia and emerging economies contributing to considerable rise in Intra-Asian and global trades. During the next three years, the growth is projected to be somewhat lower at 8.5% p.a. The Container fleet growth is expected to be around 8% p.a. from 2011 upto 2015.
Risks: There is uncertainty over the economic recovery in many developed nations with persistently high unemployment in some regions, rising oil prices and inflation, and sovereign debt issues in some European countries. The combined impact of these factors could result in the financial crisis spreading across Europe which could lead to a recession in global economy with GDP growth down to only 2.4% in 2011 i.e. by almost half of the currently projected growth. In such a scenario, there would be a significant adverse impact on trade and shipping prospects. Further, in the Dry Bulk segment, the supply overhang could impact the charter markets.. In the Crude Oil segment, the high international oil prices could result in US increasing its domestic oil production (as also bio-fuels and ethanol); at the same time, the oil consumption would also stagnate in view of the high prices.
Eco Friendly and Conservation of energy As a policy, the Company remained committed to environmental protection as per International Convention for the Prevention of Pollution from Ships. All engines being fitted on board are meeting latest requirement of NOx compliance. Necessary steps have been taken to minimize air pollution from ships. New designs of critical ships? systems have been adopted which further minimize/eliminate risk of oil pollution. The Company took various steps to conserve energy loss at sea through the exhaust of Marine Diesel Engines / Boilers in addition to other forms of conservation eg. use of Fresh Water Generator, Application of Tin-free Self-Polishing Paints, etc. Ballast Water Treatment plants and Silt Water Management are being introduced for the recently ordered ships. Vessels antifouling coating has also been changed to TBT free paints. A ship recycling plan indicating details of all potentially hazardous material on board used during construction is provided to all new ships which will greatly contribute towards on board occupational health and safety and also environmentally friendly re-cycling of ships. The PEST factors affecting the SCI are Political: Inernational politics,(the growth of other Shipping companies hampers the view of global market) Economic- How does it affects the global slowdown, the losses incuured. Hence in turn reduces the import and export business. Social: Is it causing any environmental hazards to the society, Awareness amongst the people for this type of government organization. Technological: the latest technologyies being developed to enhance and improve the business. Business Description:
Shipping Corporation Of India Limited (The) operates in the Deep sea foreign trans. of freight sector. The Shipping Corporation of India Ltd. (SCI) is an India-based shipping company. The Company operates in three segments: Liner segment, Bulk segment and Others. Liner segment includes break bulk and container transport. Bulk segment includes tankers (both crude and product), dry bulk carriers, gas carriers and phosphoric acid carriers. Others include offshore vessels, passenger vessels and services and ships managed on behalf
of other organizations. As of March 31, 2011, the Company owned 17 bulk carriers consisting of 15 Handymax and two Handysize vessels. During the fiscal year ended March 31, 2011 (fiscal 2011), the total quantity of crude oil transported by the Company was about 23.867 million metric tons (mmt.), which included 3.54 mmt. in cross trade, 13.73 mmt. of imported crude for Indian Oil Industry and 6.36 mmt. coastal movements. In addition, SCI transported about 2.87 mmt. of imported crude for Indian Oil Industry through inchartered vessels.
The Financial performance of the company over the last five years
Five Year Financial Highlights
Five year financial highlights 2006-2007 2007-2008 2008-2009 2009-2010 2010-11 Earnings Total income 4210 4084 4564 3896 4020 EBIDTA 1493 1269 1443 909 1186 PBT 1110 904 1055 476 657 PAT 1015 814 941 377 567 Dividend per share (in Rs.) 8.5 8.5 6.5 * 5.0 5.5** Dividend Payout 24% 29% 29%* 56.18% 45.15%** 5632 6209 6337 7168 Net worth of the company 5100 Ratios Book value per share in Rs. 180.65 199.5 146.62* 149.65 153.89** Earnings per share in Rs. 35.94 28.83 22.21* 8.90 13.01** Current ratio 2.88 3.27 2.90 2.95 3.19 Debt Equity ratio 0.24 0.26 0.40 0.40 0.7 Return on Net worth % 21.46% 15.16% 15.89% 6.00% 8.40% * During the financial year 2008-09, the Corporation has issued 141151215 fully paid up equity shares of Rs. 10/- each as bonus shares.
The major competitors for the company are The company is compared to: Essar Ports Limited, Great Eastern Shipping Company Limited and Nanjing Tanker Corporation
Sources: SCI English Annual Report 2011 Final - 11 October 2011-b590d3.pdf www.shipindia.com
doc_524349940.docx
This is a documentation is about company analysis of Shipping corporation of india.
Shipping Corporation of India Ltd.
Company Analysis :
1. Brief description
The Shipping Corporation of India was established on October 2nd, 1961, by the amalgamation of Eastern Shipping Corporation and Western Shipping Corporation. SCI is headquarted at Mumbai . Starting out as a marginal Liner shipping Company with just 19 vessels, the SCI has today evolved into the largest Indian shipping Company. The SCI also has substantial interests in various segments of the shipping trade. SCI?s owned fleet includes Bulk carriers, Crude oil tankers, Product tankers, Container vessels, Passenger-cum-Cargo vessels, Phosphoric Acid / Chemical carriers, LPG / Ammonia carriers and Offshore Supply Vessels. Sailing through for nearly five decades, the SCI today has a significant presence on the global maritime map. SCI has been servicing both national and international trades.
The SCI is today the only Indian shipping Company operating: break-bulk services, international container services, liquid/dry bulk services, offshore services, passenger services. The SCI has immensely contributed to the growth of India?s EXIM trade and the national exchequer, by being a net earner/saver of valuable foreign exchange.
As a profitable commercial venture of the Government of India, the SCI has an excellent track record of profitability since its inception. The SCI?s annual performance has consecutively been rated excellent for a record 18 times, under the Memorandum of Understanding (MoU) signed with the Government of India.
Liberalization and globalization of the Indian economy has presented the SCI with a suite of growth and diversification opportunities. The SCI?s growth has been additionally spurred on by the presence of a modern, young and diversified fleet, operated by a large pool of well
trained and experienced manpower, both onshore and at sail. The Government of India has conferred “Navratna” status to SCI on 01.08.2008 - enhanced autonomy and delegation of powers to the Company towards capital expenditure, formation of Joint Ventures, mergers, etc.
Continued profitability of the SCI is been due to a slew of innovative and timely strategies and measures adopted by the SCI management. Amongst these include, inter alia, judicious and optimal utilization of available tonnage, by deploying it in the most remunerative sectors; commencement of new services in niche markets; identification and expeditious disposal of value destroyers or non-performing assets; forging alliances with leading market players to enhance cargo; availability and apportioning of expenses; and administrative cost cutting.
Thrust areas for growth and diversification focus on energy transportation, including a sunrise segment like transportation of LNG and containers. The SCI forays into new thrust areas could either take the form of direct capital investment or by forging strategic and symbiotic alliances with significant market players in the market. The SCI has heralded India?s entry into the specialized field of LNG transportation, by acquiring a stake in the two Indian LNG transportation agreements contracted till date, after a global bidding process. SCI is the only Indian shipping company engaged in transportation of LNG, a vital fuel for India?s power plant and chemical / petrochemical industry. For the same purpose, SCI has formed three Joint Ventures with one vessel each. On two of these LNG vessels, SCI is managing onboard operation and technical management and the remaining vessels is fully manned by SCI. The SCI possesses all the ingredients essential for emerging as a truly world class international shipping Company. The endeavour of the management is to facilitate the release of boundless energy and initiative streams, which will be channelled for the growth and prosperity of the Company and the nation.
The Bussiness level SWOT analysis is
Strengths: As per the recent forecast by the National Council of Applied Economic Research (NCAER), the average GDP growth for 2011-12 is reckoned at around 8.5%, at nearly the same level as in 2010-11. . The cargo traffic at the Major ports is expected to increase to around 615 million tons in 201112 i.e. a growth of around 8% over the previous year?s level. India?s exports surged to a record high growth of 37.6% in 2010-11, as global demand soared for engineering goods, oil products and gems manufactured in India, Asia?s third-largest economy. Exports were at $245.9 billion for the year, while imports rose 22% to $351 billion. The total cargo traffic at the Major Indian ports in 2010-11 was 569.91 million tonnes (mt.), with the traffic growthdeclining to 1.57% from 5.8% in the previous year. This sharp fall in the growth has been attributed to various factors: Ban on iron ore exports (which resulted in reduced traffic at New Mangalore, Paradip, Mormugao and Ennore ports) Many planned power projects that would have resulted in considerable coal traffic remained sluggish; consumer product exports too were slack.
Opportunities and Threats: The World economy is projected to grow at a slower rate of 4.2% in 2011, down by nearly 1% from the previous year?s rate. It is expected to improve marginally in the next few years with growth picking up to 4.4% in 2012 led by China and „Developing Asia? (excluding China) with 9% and 6.4% GDP growths, respectively. Subsequently, the world economy is projected to slow down slightly to an average 4.3% p.a. from 2013 to 2015.
Indian shipments to China would lose market share to the long-haul Brazilian supplies. The average distance of Chinese steel products exports is also likely to increase modestly. On the Fleet side, the dry bulk fleet is expected to grow by 14% in 2011, followed by 9% growth in 2012 and thereafter the growth is projected to average 5% per year upto 2015.
In the Oil segment, with strong demand expected to emerge from Asia, the overall Oil trade demand is projected to grow by a little over 3% in 2011, almost the same rate as witnessed in 2010. Crude oil trade is likely to grow by 3% and refined Product trade by 4%. Upto around 2013, in view of the lost production of crude oil in Libyan, the long-haul shipments of crude oil to North America, China and Europe are expected to increase and contribute significantly to shipping demand. However, subsequently, due to rising pipeline imports in China and slower oil consumption growth in most regions, the impact of such long-haul shipments is expected to reduce.
The Product trade is expected to experience a higher growth with Europe increasing its refined product imports, higher US exports to Latin America, and higher Japanese imports of fuel oil. Thus, for the period from 2012 to 2015, both Crude and Product trade demand is reckoned to grow at an average annual rate of 3%. On the Fleet side, the Tanker fleet is expected to grow by 5.1% in 2011 and 5% in 2012, followed by slower growth in the coming years. In the Container segment, global trade growth is expected to slow down to 7.6% in 2011 and then pick up in 2012 to 10.1% with domestic demand in Asia and emerging economies contributing to considerable rise in Intra-Asian and global trades. During the next three years, the growth is projected to be somewhat lower at 8.5% p.a. The Container fleet growth is expected to be around 8% p.a. from 2011 upto 2015.
Risks: There is uncertainty over the economic recovery in many developed nations with persistently high unemployment in some regions, rising oil prices and inflation, and sovereign debt issues in some European countries. The combined impact of these factors could result in the financial crisis spreading across Europe which could lead to a recession in global economy with GDP growth down to only 2.4% in 2011 i.e. by almost half of the currently projected growth. In such a scenario, there would be a significant adverse impact on trade and shipping prospects. Further, in the Dry Bulk segment, the supply overhang could impact the charter markets.. In the Crude Oil segment, the high international oil prices could result in US increasing its domestic oil production (as also bio-fuels and ethanol); at the same time, the oil consumption would also stagnate in view of the high prices.
Eco Friendly and Conservation of energy As a policy, the Company remained committed to environmental protection as per International Convention for the Prevention of Pollution from Ships. All engines being fitted on board are meeting latest requirement of NOx compliance. Necessary steps have been taken to minimize air pollution from ships. New designs of critical ships? systems have been adopted which further minimize/eliminate risk of oil pollution. The Company took various steps to conserve energy loss at sea through the exhaust of Marine Diesel Engines / Boilers in addition to other forms of conservation eg. use of Fresh Water Generator, Application of Tin-free Self-Polishing Paints, etc. Ballast Water Treatment plants and Silt Water Management are being introduced for the recently ordered ships. Vessels antifouling coating has also been changed to TBT free paints. A ship recycling plan indicating details of all potentially hazardous material on board used during construction is provided to all new ships which will greatly contribute towards on board occupational health and safety and also environmentally friendly re-cycling of ships. The PEST factors affecting the SCI are Political: Inernational politics,(the growth of other Shipping companies hampers the view of global market) Economic- How does it affects the global slowdown, the losses incuured. Hence in turn reduces the import and export business. Social: Is it causing any environmental hazards to the society, Awareness amongst the people for this type of government organization. Technological: the latest technologyies being developed to enhance and improve the business. Business Description:
Shipping Corporation Of India Limited (The) operates in the Deep sea foreign trans. of freight sector. The Shipping Corporation of India Ltd. (SCI) is an India-based shipping company. The Company operates in three segments: Liner segment, Bulk segment and Others. Liner segment includes break bulk and container transport. Bulk segment includes tankers (both crude and product), dry bulk carriers, gas carriers and phosphoric acid carriers. Others include offshore vessels, passenger vessels and services and ships managed on behalf
of other organizations. As of March 31, 2011, the Company owned 17 bulk carriers consisting of 15 Handymax and two Handysize vessels. During the fiscal year ended March 31, 2011 (fiscal 2011), the total quantity of crude oil transported by the Company was about 23.867 million metric tons (mmt.), which included 3.54 mmt. in cross trade, 13.73 mmt. of imported crude for Indian Oil Industry and 6.36 mmt. coastal movements. In addition, SCI transported about 2.87 mmt. of imported crude for Indian Oil Industry through inchartered vessels.
The Financial performance of the company over the last five years
Five Year Financial Highlights
Five year financial highlights 2006-2007 2007-2008 2008-2009 2009-2010 2010-11 Earnings Total income 4210 4084 4564 3896 4020 EBIDTA 1493 1269 1443 909 1186 PBT 1110 904 1055 476 657 PAT 1015 814 941 377 567 Dividend per share (in Rs.) 8.5 8.5 6.5 * 5.0 5.5** Dividend Payout 24% 29% 29%* 56.18% 45.15%** 5632 6209 6337 7168 Net worth of the company 5100 Ratios Book value per share in Rs. 180.65 199.5 146.62* 149.65 153.89** Earnings per share in Rs. 35.94 28.83 22.21* 8.90 13.01** Current ratio 2.88 3.27 2.90 2.95 3.19 Debt Equity ratio 0.24 0.26 0.40 0.40 0.7 Return on Net worth % 21.46% 15.16% 15.89% 6.00% 8.40% * During the financial year 2008-09, the Corporation has issued 141151215 fully paid up equity shares of Rs. 10/- each as bonus shares.
The major competitors for the company are The company is compared to: Essar Ports Limited, Great Eastern Shipping Company Limited and Nanjing Tanker Corporation
Sources: SCI English Annual Report 2011 Final - 11 October 2011-b590d3.pdf www.shipindia.com
doc_524349940.docx