Mercantile Shipping Company PLC Group has made a net loss of Rs. 348.9 million after tax, having provided for substantial exchange losses aggregating to Rs. 219.9 Million compared to a net loss of Rs. 185.7 million last year.
The company showed a loss after tax of Rs. 260.0 Million after the provision made for the write-off of the investment of Rs. 237.6 Million in Mercantile Emerald Shipping (Pvt) Ltd. This is in comparison to a net loss after tax last year of Rs. 13 million.
The present charter rates are USD 5,350 per day for both vessels 'Mercs Uva"and "Mercs Uhana".
The indications are that there will be a marginal increase in charter rates in the near future and it is hoped that the rates will continue on an upward trend in time to come, said A. N. U. Jayawardena, Chairman Mercantile Shipping Company PLC in their 34th Annual General Meeting of the Company.
"With charter rates continuing to be unstable in this uncertain economic environment the position of the Company has deteriorated further."However the German Bank has continued to cooperate with the Company in dealing with the servicing of the loan and the Company continued to pay only the interest and a 25% component of the capital of the loan installment. However in view of the negative net asset position resulting from the continuing losses, and in keeping with the Sri Lanka Financial Reporting Standards the Board has made a provision for the write-off of the Investment by the Company in Mercantile Emerald Shipping (Pvt)Ltd.
The Company continues to receive a stable flow of income from both its investment buildings and enjoys rent free space for its office.The Company investment in the joint venture with Hemas Transportation (Pvt) Ltd has been completely eroded due
to continuing losses and the Company is in the process of liquidation.
Meanwhile the Company has, in the present circumstances of the continued worldwide economic recession, taken the following measures to mitigate the problems faced by it.
"Close negotiations are in progress with the German Lending Bank to arrive at an acceptable solution with regard to the facility obtained." "In addition continued control of operational costs is being implemented and administrative costs have been reduced to the bare minimum. It is anticipated that with these stringent cost controls, the Company will be able to continue to pay interest plus 25% of the Capital tranche throughout the current financial year, unless any unexpected eventuality occurs."
"Continued to keep the vessels on charter despite there being no positive change in the charter rates."
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The company showed a loss after tax of Rs. 260.0 Million after the provision made for the write-off of the investment of Rs. 237.6 Million in Mercantile Emerald Shipping (Pvt) Ltd. This is in comparison to a net loss after tax last year of Rs. 13 million.
The present charter rates are USD 5,350 per day for both vessels 'Mercs Uva"and "Mercs Uhana".
The indications are that there will be a marginal increase in charter rates in the near future and it is hoped that the rates will continue on an upward trend in time to come, said A. N. U. Jayawardena, Chairman Mercantile Shipping Company PLC in their 34th Annual General Meeting of the Company.
"With charter rates continuing to be unstable in this uncertain economic environment the position of the Company has deteriorated further."However the German Bank has continued to cooperate with the Company in dealing with the servicing of the loan and the Company continued to pay only the interest and a 25% component of the capital of the loan installment. However in view of the negative net asset position resulting from the continuing losses, and in keeping with the Sri Lanka Financial Reporting Standards the Board has made a provision for the write-off of the Investment by the Company in Mercantile Emerald Shipping (Pvt)Ltd.
The Company continues to receive a stable flow of income from both its investment buildings and enjoys rent free space for its office.The Company investment in the joint venture with Hemas Transportation (Pvt) Ltd has been completely eroded due
to continuing losses and the Company is in the process of liquidation.
Meanwhile the Company has, in the present circumstances of the continued worldwide economic recession, taken the following measures to mitigate the problems faced by it.
"Close negotiations are in progress with the German Lending Bank to arrive at an acceptable solution with regard to the facility obtained." "In addition continued control of operational costs is being implemented and administrative costs have been reduced to the bare minimum. It is anticipated that with these stringent cost controls, the Company will be able to continue to pay interest plus 25% of the Capital tranche throughout the current financial year, unless any unexpected eventuality occurs."
"Continued to keep the vessels on charter despite there being no positive change in the charter rates."
www.dailynews.lk
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