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ABG Shipyard sees sales momentum; to cut debt

ABG Shipyard sees sales momentum; to cut debt
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First Published: Wed, Jun 01 2011. 04 16 PM IST
Updated: Wed, Jun 01 2011. 04 16 PM IST
Mumbai: ABG Shipyard Ltd expects its FY12 sales to grow about 30% led by a buoyant offshore segment and plans to bring down its debt by around Rs400 crore, said chief financial officer Dhananjay Datar.
“Growth momentum will continue. We are seeing some good movement in the offshore side. So orderbook will grow from here onwards,” Datar said.
In FY11, the company’s net sales grew 15% to Rs2,077 crore. Datar expects EBITDA margins in the range of 21-22%, similar to that reported in FY11.
At present, its orderbook stands at Rs14,500 crore and the firm hopes to add around Rs2,000 crore of orders this fiscal, he said.
“The offshore segment is looking very bright. What we are doing is targeting the higher end vessel (orders) which have higher pricing,” Datar said.
“There are many orders available for the lower category anchor handlers, but we are trying to see if we can jump to the next level,” he added.
ABG expects to deliver over 20 vessels this year, including five bulk carriers and several others to the offshore suppliers, he said.
The company has delivered 16 vessels in 2010/11, the highest by any shipyard in India. It has shipbuilding units in Surat and Dahej in Gujarat.
It is also in talks with the Nigerian government and private equity investors to build a shipyard for large offshore and cargo vessels in Nigeria through a joint venture in which the Indian company will hold a 40% stake.
The discussions were still in the initial stages.
Last month, ABG Shipyard had said it received industrial licences for design and construction of naval warships and support ships and has already participated in a couple of defence tenders.
“Defence is a large opportunity. We have already participated in a couple of tenders and are waiting for the outcome,” he said.
Rival Pipavav Shipyard last month secured a $660 million order from the Indian Navy to build five naval gunboats and offshore patrol vessels. The firm had said it expects the government to spend $50 billion to construct naval defence vessels in coming years.
ABG Shipyard whose net profit fell over 17% in FY11 to Rs188 crore, hopes to trim debt further and boost its profits.
“We are trying to reduce our debt so that the interest costs goes down and the profit grows,” Datar said, adding the firm had cut its debt by over Rs500 crore in FY11.
Its aims to bring down its debt to Rs2,000 crore by the end of the fiscal from about Rs2,400 crore now.
ABG Shipyard shares closed flat at Rs382.45 in the Mumbai market that was up 0.57%.
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First Published: Wed, Jun 01 2011. 04 16 PM IST
More Topics: ABG Shipyard | Debt | Offshore | Sales | Vessel |