Sept 11, 2007 (LBO) – Sri Lanka’s Mercantile Shipping Company, a ship owner listed on the Colombo bourse, has said higher ship charter rates and chartering of vessels to the government have helped it turn around. The company, whose small fleet was once the island’s biggest, made a net profit of 58 million rupees for the year ended March 31, 2007 compared with a loss of 42 million.
Revenue fell to 567 million rupees from 682 million.
Chairman A.N.U. Jayawardena told shareholders in the company’s annual report that the group did “extremely well” during the year.
“The sharp improvement in profitability is mainly due to the increased charter hire for Safmarine Soyo, and income from other vessels which have been chartered to the government of Sri Lanka.”
Strict cost control measures taken after the group was restructured also helped.
The company, a Sri Lanka-German joint venture, has shed staff and sold off old and uneconomical vessels, including the 40-year-old Mercs Kirinda.
The company has been talking of renewing its fleet after having sold off its oldest ships for scrap.
However, Jayawardena warned that the age of the remaining vessels means certain increase in repairs and