Aug 30, 2011 (LBO) – Sri Lanka’s Mercantile Shipping Company is renegotiating vessel hire fees and trying a profit-share deal after slipping into the red last year when it was forced to reduce charter rates. But the company also managed to reduce loan repayments, has stable cash flows and anticipates a market recovery, chairman A N U Jayawardena said.
It made a loss of 23 million rupees in the financial year to March 31, 2011 compared with a profit of 28 million rupees the year before. It had lost 74 million in 2008-09.
Sales rose 25 percent to 599 million rupees in the year to March 31, 2011. The loss per share was 8.21 rupees against earnings of 9.94 rupees the previous year.
Finance costs shot up to 91 million rupees from 56 million rupees the year before while other income and gains fell to six million rupees from 201 million rupees.
The company attributed the latest loss to a downturn in cargo volumes and oversupply of tonnage that forced down charter rates.
Mercantile Shipping Company sold its last sea going vessel for scrap in January 2010 but has a fully-owned subsidiary, Mercantile Emerald Shipping, which operates two vessels for international sea cargo.