Profits Jump for Mercator Lines

Mercator Lines (Singapore), a leading Indian owned international dry bulk shipping company focused on high growth markets such as India, Indonesia and China, has announced financial results for the third quarter of Financial Year 2013-2014 ending 31st March 2014 (Q3 FY 2014).

Revenue at US$23.2 million is an increase of 8 per cent as compared to Q2 FY 2014 and 67 per cent as compared to Q1 FY 2014.
EBITDA at US$7.4 million is an increase of 52 per cent as compared to Q2 FY 2014 and 119 per cent as compared to Q1 FY 2014. EBITDA margin has increased to 32 per cent in Q3 FY 2014 from 23 per cent in the previous quarter.
The revenue for nine months ending 31 December 2013 was at US$58.5 million as against US$84.2 million in the corresponding period previous year. The company reported a net loss of US$15.4 million for the nine month period as against a loss of US$72.7 million in the corresponding period previous year.

The company reports that the dry bulk shipping industry is continuing on its path to recovery. By the end of 31 December 2013, the Baltic Dry Index (BDI) had reached 2277 points from 896 points at the start of the financial year. The market rate of Panamax vessels stood at US$14,556 per day on 31 December 2013 as against US$9,238 per day at the start of the financial year. The vessel values have also strengthened significantly since the start of the financial year. The value of a 5 year old 76,000dwt dry bulk Panamax vessel was approximately US$26.0 million by end of Q3 FY 2014 as against approximately US$19.0 million at the start of the financial year. All these factors indicate signs of long impending recovery in the dry bulk shipping industry.

Shalabh Mittal, managing director and chief executive officer of Mercator said: “We are happy to see a continuous trend of improved financials on a quarter on quarter basis in this financial year. Significant improvement in market fundamentals and cost rationalization measures adopted by the company has helped us achieve better results”.

Mercator, which commenced operations in 2005, has established a market presence in the dry bulk transport market, specializing in the transportation of dry bulk commodities such as coal, iron ore and grains. With exposure to the infrastructure sectors like steel and power of India and China, Mercator is well positioned to benefit from the strong growth of these countries.