Buoyed by rising freight rates, most leading shipping companies have made record net profits in the first nine months of 2003-2004.

The income from fleet operations of eight listed shipping companies increased 33.1 per cent to Rs 4,063 crore (Rs 40.63 billion) in the first nine months between April and December 2003, up from Rs 3,053 crore (Rs 30.53 billion) in the corresponding period last year. Their aggregate net profit increased 165.1 per cent to Rs 808 core (Rs 305 crore).

The Shipping Corporation of India posted its highest-ever net profit of Rs 369.85 crore (Rs 3.7 billion), up 151.1 per cent from the net profit in the corresponding period of the previous year.

Great Eastern Shipping Company achieved its highest-ever net profit of Rs 286.36 crore (Rs 2.86 billion) in the nine months ended December 2003, up 113.4 per cent.

Its revenues from fleet operations increased 28.7 per cent to Rs 889.90 crore (Rs 8.9 billion).

Essar Shipping's nine-month net profit jumped 229 per cent to Rs 88.22 crore (Rs 882 million). Varun Shipping's net profit surged 275.5 per cent to Rs 18.25 crore (Rs 182 million) in the nine months to December 2003.

Mercator Lines recorded a 200 per cent rise in income from operations and a whopping 493 per cent rise in net profit in the nine months of 2003-2004.

The rise in revenues and profits is due to the buoyant freight rates. In the dry bulk category, freight rates of cape size bulk carriers were up by an average of 218.6 per cent to $38,365 a day in December 2003 from $12,044 a day in April 2003.

The Panamax rates were up 183 per cent to $21,361 ($7,544) and Hmax averages were up 100 per cent to $16,402 per day ($8,232 a day).

Very large crude carrier tanker rates climbed 84.2 per cent to an average of $43,635 a day during the nine months ended 2003 from $23,695 a day during the corresponding period of the previous year.

The freight rates of Suezmax tankers rose 57.8 per cent to $30,960 a day ($19,623 a day), Aframax tankers rates were up 54.4 per cent to $30,432 a day ($19,709 a day) and Handysize tankers rates were up 38.8 per cent to $19,989 a day ($14,402 a day).

"I expect the current record freight levels to be firm over the next six to 12 months. After that, a correction is likely, but it is not possible the estimate the extent of the correction," SCI chairman and managing director P K Srivastava said.

The buoyancy in freight rates is driven by the resurgence in the global economy and by demand from China. Further, new regulations regarding tanker security and safety have been coming in, pushing some vintage tonnage to the scrapyard.