FESCO REPORTS $82-MILLION LOSS FOR 1999
Far Eastern Shipping Co., the Russian shipping company, reported a net deficit of $82 million for 1999, the second year of heavy losses.
Last year’s loss follows a deficit of $128 million in 1998.
Revenue from hire and freight income was $331 million in 1999, up 2 percent on the $323 million revenue in the previous year.
Voyage and running costs increased by 11 percent, to $281 million.
Despite lower administration expenses, non-profit based taxes and finance charges last year, FESCO reported a heavier loss before taxation and exceptional items of $48 million, as compared to a deficit of $35 million in 1998.
FESCO also posted exceptional losses of $36 million last year, compared to exceptional losses of $90 million in 1998.
V. Miskov, chairman of the board of directors, said that the company had to overcome a crisis last year when the Russian Ministry of Finance failed to repay bonds held by FESCO. The Russian shipping company had to charter in vessels from overseas instead of implementing its fleet renewal program.
Miskov said that the company’s FESCO Pacific Line transpacific service, launched last year, has been profitable. FESCO has improved its management to strengthen its position on the most profitable routes, he added.
The loss for 1999 has eaten into the substantial accumulated retained earnings of FESCO. Retained earnings dropped to $416 million at the end of 1999, from $491 million at the end of 1998.
FESCO said that its relations with western financial institutions are stable.