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Mercator swings to Rs 24.58 cr profit for FY2017

Erasing Rs 890.10 crore loss of FY2016, Mercator swung to Rs 24.58 crore profit for FY2017, says a company note. The company posted a total revenue of Rs 2, 2716 crore for FY17 against Rs 2,725 crore total revenue registered for FY16. Total expenses of the company declined to Rs 2,212.44 crore in the current year under review in comparison to the total expenses of Rs 3,8148.07 crore recorded during year ago review period.

Operational Performance:-

Dredging

Revenues under dredging vertical got impacted due to completion of Kandla Port project and subsequent dry-docking of 2 dredgers with dredgers back on track in July 2017. The company forayed into Dredging business in 2007 deploying dredgers across India mainly at major ports providing maintenance dredging services.

Shipping

The Shipping vertical witnessed charter rates dip and voyages reduced due to OPEC oil cuts. The shipping enterprise operates a fleet of 8 vessels which consists of tankers, a gas carrier and bulk carriers. The division offers fleet as a mix of spot contracts and fixed-term charter contracts depending on the specific needs of clients.

Oil & Gas

The company is on track for commercial production by first half of CY18. Mercator has received extension for completion of minimum work program. The field development plan has submitted for Jyoti 1 and Jyoti 2 to Director General of Hydrocarbons in Q3FY18, awaiting approval. The company has 100 per cent interest in 2 Cambay basin blocks with 2oil discoveries being made. In this regard, third party report for certificate of resources is available. Mercator has 25% interest in 2 Myanmar blocks. EPC arm of the company is capable to execute turnkey projects and the process is underway to complete the Sagar Samrat project on EPC basis at a yard situated at Abu Dhabi.

Coal

The company has focused on maximizing operational efficiencies maintained in the coal operations. As many as 3 coal mining licenses in Indonesia are operated by the company of which operations ongoing at 1 mine. The shipping major also holds 1 mining license in Mozambique. Additionally, it offers coal infrastructure services comprising of an all-weather haul road, stockpile facility, crushing unit & jetty loading facility to other coal mines situated in proximity to the coal mine. The coal division has expertise in providing complete logistics solutions for coal i.e. transportation of coal from the foreign load port until its final destination. The customers include consumers as well as coal stockiest intermediaries, based in India and other Asian markets.  

Financial Performance

Revenues impacted adversely due to factors comprising loss of revenue post completion of Kandla Port Project (contract not renewed due to lower margins); revenues impacted due to reduction in charter rates by 15%. The company therefore is exploring strategic initiatives to further de-leverage and improve balance sheet.

CSR Activities

Some of the key CSR initiatives undertaken during the financial year include Project Prem Sukhda envisaged to operate dispensaries, hold awareness sessions and conduct personal hygiene camps for children. Under Prem Sagar project, the company launched computer education and sewing and design course for local community. The company floated project Prem Pravah to sponsor therapy to children with hearing impairment and support NGOs working on eye care and disabled. The CSR project Prem Pravan was initiated to sponsor therapy to children with hearing impediment and support NGOs working on eye care, disabled.


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