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Should be back to pre-COVID levels if things sustain: GE Shipping

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GE Shipping's fourth-quarter performance saw revenue slip around 30 percent but margins have been higher aided by a forex gain. The company has also seen a lower finance cost which has boosted the profit in Q4 and that is mainly because they have brought down debt.

GE Shipping's fourth-quarter performance saw revenue slip around 30 percent but margins have been higher aided by a forex gain. The company has also seen a lower finance cost which has boosted the profit in Q4 and that is mainly because they have brought down debt.
On the outlook for its businesses G Shivakumar, Executive Director & CFO of the company said, “The outlook for these - dry bulk depends on how long this construction boom and the infrastructure spending if that is so continuing. In oil demand, we think that oil demand or the oil analysts think that demand will pick up sharply over the summer, and by the end of calendar 2021 we should at least be back to kind of demand we had in 2019.”
He added, “Outlook is subdued for the tanker space, dry bulk continues to be good but it is anybody’s guess whether this demand continues.”
On margins, he said, “We had lower fuel cost because we had hedged a significant part of our fuel cost and that is why the margins have improved a bit during the quarter.”
On business segments, Shivakumar said, “Unfortunately, the corner of the market that we are in the trade is not doing so well. About 60 percent of our fleet is crude and product tankers, oil demand has not yet even come back to 2019 levels of oil demand which means demand for product tanker and the crude tanker is very weaker. Those ships have been earning only around operating cost, maybe slightly more than operating cost for the past six months or so.”
“LGP is doing well, the trade has picked up. The one which is causing most excitement among the commodity shipping sector is dry bulk where the trade has picked up,” he added.
For full management commentary, watch the video.

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