Mercator Lines (Singapore), the Indian-owned international dry bulk shipping company focused on India and China, today announced a decline of 46% in net profits to US$40.7 million ($56.3 million) for the financial year ended March 31, 2010 (FY2010), compared to US$75.8 million for the corresponding period.

The group’s revenues for the full year FY2010 declined by 22% to US$144.5 million from US$186.1 million in FY2009. This decline is primarily attributed to decline in the spot market rates and renewal of long term charters at rates lower than FY 2009.

The Time Charter Equivalent (TCE) rate per vessel per day, decreased to US$27,605 for FY2010 down by 34% from US$41,886 in the previous corresponding period. Total number of vessel operating days recorded a rise of 15% to 4,703 days in comparison to 4,084 days in FY2009.

For the fourth quarter ended March 31, 2010, group revenue surged by 9% to US$39.3 million from US$36.2 million while the net profits dropped by 11% to US$13 million compared to fourth quarter ended March 31, 2009. The drop in profits is on the back of decline in TCE rates by 12% to US$29,681 which was due to renewal of new long term charters at rates lower than those in FY 2009.

The board of directors has proposed a tax-exempt final dividend of 1.16 cents per share representing a payout ratio of 25%. compared with 12.5% payout last year. The dividend is proposed to be paid through Scrip Dividend Scheme.

Under the scheme, shareholders will have the option to receive shares instead of cash dividends. The option can be exercised by shareholders in part or whole of their shareholdings. Issue price of shares is determined on a prescribed formula based on the market price. The scheme is applicable subject to statutory and shareholders approvals.