rational and radical initiatives including going after high-value cargo,
reducing coal volume, diversifying cargo mix, enhancing port & ICD
capacities could deliver a 20% jump in container volumes and 12%~14%
surge in cargo volumes in FY18, say Adani Ports and Special Economic Zone
Ltd(APSEZ) in a note on 16th August. “We estimate a
rise in EBITDA margins from 69% to 70% through the enhanced use of technology,
diversified cargo mix and higher capacity utilization. We will continue to
actively reduce our interest cost by raising funds from global bond markets.
These measures will position us to register profit growth of 18%-20% in FY18”,
said Mr Karan Adani, Chief Executive Officer, APSEZ .
reported yet another year of profitable growth in FY17. The company’s revenue
increased 19% to Rs 8,439 crore (FY16: Rs 7,109 crore) and EBIDTA rose 24% to
Rs 5,692 crore (FY16: Rs 4,574 crore). “While we had estimated a conservative
10-15% increase in profit after tax, our FY17 net income grew by a phenomenal
35% to Rs 3,920 crore (FY16: Rs 2,914 crore). Once again in FY17, our overall
cargo throughput and container handling capacity improved and outperformed
those of our peers in India”.
all-India cargo grew by 8%, cargo handled by all Adani ports rose 11% to 169
MMT. These strong financials stem from our robust operations and our unending
commitment to improve efficiencies, to scale our use of technology and lower
our finance costs. The company’s proactive approach to mechanization,
automation and cutting-edge technology such as mobile technology, Internet of
Things and Robotics, has changed the way we manage and move cargo.
profitability on cards for FY18
operational efficiency led to reduced operating costs and thus enhanced EBITDA
margins. Further, net finance cost dropped from Rs 460 crore to Rs 323 crore
and net debt reduced by Rs 1,827 crore despite the Rs 1,450 crore payout
towards Kattupalli port, which we acquired last year from L&T Shipbuilding.
Our net debt as on 31st March 2017 stood at Rs 18,600 crore. “With these
factors combined, we exceeded our expectations to deliver higher profitability.
In line with our goal to reduce dependence on individual commodities and to
offset the decline in coal imports following the government’s revised policy,
we ramped our efforts to diversify our cargo mix and increase container
For the first
time, APSEZ handled more than 4 million Twenty Foot Equivalent Units (TEUs) of
containers, growing our container volumes by 27% YoY against the 10% growth
achieved by ports all-India, thus expanding our market share from 27% to 31%.
This was made possible by the commissioning of CT-4 at Mundra, higher container
volumes at Kattupalli and Hazira, and the addition of services at Mundra,
Hazira and Kattupalli, which resulted from our strategic partnerships with MSC,
CMA CGM, and Maersk.
contracts boost cargo volumes
also began providing coastal transhipment services from Dhamra port to the
southern ports. Further, they shifted its game-plan from short-term contracts
to long-term multi-year coal supply arrangements for a large number of
customers. In FY17, 62% of our cargo volumes materialized from long-term
contracts. As a result of these strategies, Adani saw a growth in agriculture,
iron, steel, and project cargo volumes, which contributed to a healthy cargo
mix and higher margins. FY17 saw containers constitute 37% of our total cargo,
compared to 32% in FY16. Coal now comprises 36% of our cargo, compared to 41%
last year. Crude and other cargo, which grew by 17%, now constitute 27% of the
logistics play pays rich operational dividends
also took strides to provide endto-end logistics solutions to domestic and
multinational customers through our tailor-made service offerings. In the
logistics space, Adani Logistics Ltd (ALL) continues to be the single largest
private rail operator in the country, operating 24 rakes. Our container rail
operations span across all the ports in India. In FY17, our total rail volumes
grew 57% to 180,000 TEUs. ALL handled 300,000 TEUs of terminal volumes, which
grew 26% YoY.
began commercial operations at our Inland Container Depot (ICD) at Kilaraipur
in Punjab in addition to our existing ICDs in Patli and Kishangarh, thereby
offering a greater scope of warehousing solutions to our customers. Our SEZ at
Mundra has seen a rise in enquiries from diverse sectors such as ancillary
manufacturing units of packaging, silver, battery inverter and solar panel
industries. Adani expect these businesses to materialize in FY18. Owing to
excellent integrated rail, road and airport connectivity, and the Government’s
thrust on coastal shipping, the company has been able to service large clients
such as Britannia Ltd., Credo Minerals, and Oilfield
high on EXIM radar
Services (OWS) among others, in this past year. This, in turn, will increase
the export-import cargo of Mundra Port in the years to come. Adani Ports
retains its position as the only Indian infrastructure company to be assigned
an international investment grade rating by the three major international
ratings agencies: BBB- by Standard & Poor’s, BAA3 by Moody’s and BBB- by
Fitch Ratings. However, in FY17, Adani addressed the risks perceived by S&P
and Moody’s on related-party loans, advances and deposits. The company has now
completely recovered our exposure of Rs 3,500 crore to related parties.
evolved from an infrastructure entity to an end into a multi-commodity port.
The extension of CT-3 at Mundra will also be completed in FY18. The private
port major will be developing India’s first international deep water seaport at
Vizhinjam (Kerala) in partnership with the state government. Vizhinjam will
help position India as a competitive global transhipment hub and stake a claim
on the 2 million+ TEUs of Indian cargo transhipped annually through the Indian
logistics footprint across India, The company will also be commencing
construction of three new ICDs in the country, enhancing our total number of
ICDs to 6. The LNG terminal at Mundra is likely to become operational in
December 2017, attracting gas-based units to set up at Mundra SEZ. This, along
with our cluster development approach at Mundra SEZ, is expected to give fillip
to industrial development in the area.