Ethiopian Shipping Lines Net Profit 661m Br.

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The Ethiopian Shipping Lines (ESL) registered a net profit of 661.5 million Br exceeding its projection for the 2010/11 fiscal year by nine per cent.

During the last quarter of the 2009/10 fiscal year alone, it made an unprecedented profit of 641.3 million Br, which is 154pc of its projection for that fiscal year. It has also exceeded its projected plan by 56 million Br.

ESL, which is administered by the Privatisation and Public Enterprises Supervising Agency (PPESA), transported a total of 2.2 million tonnes of goods in the same year, less than its projection of 2.5 million tonnes.

ESL is currently operating with eight vessels with a combined carrier capacity of 150,000tn, and uses the Port of Djibouti as its base. It provides linear services to specified ports abroad on a regular sailing schedule, and plans to increase its carriage capacity to 400,000tn by bringing nine additional vessels from China which has also financed the purchase with 293 million dollars.

Importing, which accounts for the majority of freight operation, involved the transport of 1.7 million tonnes, performing less than its target to transport 2.3 million tonnes of cargo in 2010/11.

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During the 2009/10 fiscal year, around 2.5 million tonnes were transported, seven per cent above its projection, showing an increase of 305,438tn from the 2008/09 fiscal year.

ESL, the only local company involved in sea freight activities in the country, and sole multimodal transport operator (MTO), is responsible for the transportation of much of the country’s imports and exports of cargo.

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Dry port facilities launched in Modjo Town, Oromia Regional State,76Km south from Addis Abeba; and Semera, Afar Regional State, 592Km northeast of the capital, transported 44pc of shipments from the country’s total import and export goods during the 2010/11 fiscal year. This is a 56pc decrease in shipments when compared with last year.

“Although the volume of goods transported has not increased, the income has increased in part because of the way ESL charges its clients by taking volume as well as weight into account,” Ambachew Abreha, managing director of ESL told Fortune.

“Whichever measurement, tonnage or volume, that brings more cash will be considered when making payment charges,” he said.

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The system allowed importers to enter into a contract with ESL for the latter to bring the shipment to Djibouti Port, processing all requirements of clearance at the port and then delivering it to the dry ports of Modjo and Semera.

The ESL cargo operation revenue, including the multimodal transport arrangement, earned ESL revenue amounting to 4.6 billion Br, while administration and operation costs amounted to around 3.6 billion Br ate into its profits, which amounted to 661 million Br.

ESL, which required payments in dollars replacing the old local currency payment in July 20, 2010, imported 26pc of goods from China, while the United Arab Emirates (UAE) and India covered 12pc and 15pc of imports, respectively.

During the 2010/11 fiscal year, exports reached 468,019tn, exceeding its target of 237,784tn. Most of these exports went to the Gulf states and the Far East.

Ambachew is satisfied with ESL’s performance, which reached 85pc of its target for cargo shipments, and is looking forward to an improved performance when ESL acquires nine new vessels.

Source: AllAfrica/Addis fortune

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