Mumbai: Varun Shipping Co Ltd plans to spend $400 million during 2008 to expand its fleet, with focus on the offshore sector as well as tankers and gas carriers, a senior official said on Wednesday.
The firm, which has four offshore services vessels and 16 oil, gas and product carriers, is in the process of identifying assets, managing director Yudhishthir Khatau said.
“The focus of the company is to identify assets and getting them in operation as quickly as possible,” Khatau told reporters.
Varun Shipping plans to fund its capital expenditure through a mix of internal accruals and debt, Khatau said. He did not elaborate.
As of now, the company has four anchor handling tugs, two of which have been chartered by Reliance Industries Ltd.
Last year, the company’s board passed an enabling resolution to enter oil exploration and drilling.
“We would be open to other assets in the offshore industry,” he said. However, its board is yet to take any specific decision to acquire rigs, he said.
The revenue from the offshore segment jumped to Rs440.3 million in the October-December quarter, compared with Rs31.3 million in the year-ago period.
Varun Shipping, which has most of its earnings billed in dollar terms, reported a 86% jump in quarterly net profit to Rs736.9 million, despite the appreciation of the rupee.
It was helped by freight rates, which rose by more than one-third in the October-December quarter, compared with the year-ago quarter and addition of fleet, Khatau said.
“We see a steep increase in seaborne volumes in LPG (liquefied petroleum gas) and ammonia,” he said, but added the fourth quarter rates are not as firm as the preceding quarter.
Shares in the company ended 15.12% higher at Rs76.50 in the Mumbai market.