Adani Ports Q2FY18 Concall Summary

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 Financial Highlights

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  • In the H1 of current year, the company experienced a YoY growth of 36% to INR 5415 crores.
  • EBITDA increased by 31% to INR 3493 crores.
  • EBITDA margins increased by 200 basis points to 69%.
  • PBT for H1 FY ’18 increased by 21% to INR 2470 crores.
  • PAT for the same period was INR 1751 crores.
  • EPS of INR 8.46 per share.
  • Ports operating revenue has grown in H1 by 5% to over INR 3500 crores.
  • Ports revenue has grown by 3% to INR 1808 crores.
  • Logistics growth in the half year was 14% to INR 406 crores.
  • Q2 grew to INR 545 crores on the income side, and in H1 it has been 1165 crores.
  • Port development profit has been 784 crores for CT4.
  • Ports revenue has increased by 3% in the quarter to INR1808 crores.
  • Total operating revenue and EBITDA grew by 27% to INR 500 crores.
  • Net debt has reduced from INR 737 crores and is now at INR 17864 crores.
  • EBITDA on SEZ INR 1241 crores and INR 545 crores in Q2 and Q1 respectively.
  • Net expenses CT4 INR 381 crores
  • Losses in cargo at Dharma in Q1 amounted about 1.3 million tonnes
  • Gross debt gone down by INR 111 crores.
  • Annual port income is around INR 7409 crores.
  • Cap-Ex of Adani Logistics will be around INR 150crores.
  • In Kattupalli the total amount of acquisition will range from 1800-2000 crores.
  • Q2 EBITDA is about INR 1200 crores

Operational Results:

  • APSEZ has handled cargo volumes of 87 million metric tonnes in H1 of FY ’18, a growth of 2.2%.
  • Cargo volume growth has increased from the past, and now APSEZ is seeing a double- digit growth in cargo volumes in Oct and a similar trend in Nov.
  • Outperformed all Indian ports growth, where all Indian container volume grew by 12%, APSEZ’s container volume grew by 19%.
  • Container volume at Kattupalli grew by 29%, at Mundra by 18% and at Hazira by 17%.
  • Other bulk cargo excluding coal grew by 12%, agriproducts grew by 79%, chemicals by 26%. Minerals by 20% and edibles by 6%.
  • Crude oil volumes decreased by 21% nearly 2.28 million metric-tons because of a scheduled shut-down of 90 days by a major customer HMEL at Mundra Port.
  • Dharma cargo volumes decreased by 1.3 million metric tons were short because a berth got shut-down for expansion for 23 days in Q1 of FY ’18.
  • Kattupalliplant handled more than 43000 TEUs per month.
  • Finished land acquisition in Bangalore and in Teorus.
  •  Vizhinjam will be ready by end of calendar year 2020 and by then the capacity will increase to 2 million TEUs.
  • The Quarterly run rate has been between 6-7 million.
  • The cargo volumes have grown by 4% at Mundra and EBITDA is higher than 6%.growth. Also, it has been contributing to the profitability of the organization.
  • In FY ‘18 APSEZ handled 4.7 million tonnes of crudein Q2.
  • Hazira, Mundra and Dharma contributed about 80% to the EBITDA.
  • With Dharma business has been of 10.22 million tonnes.
  • SAIL contract was a take and pay contract with 7 million tonne.

 Growth and Market Share and Forecasts:

  • The growth from last three years has been about 4% and will remain the same for at least next 3-4 years.
  • APSEZ is forecasting to grow up to 72 to 74% in the next year.
  • Market share in container volume has increased to 33% in the H1 2017.
  • Forecasting a growth of 10-11% in next year after the expansion of CT3.
  • In next 3-4 years, there is contracts with GAIL and IOCL as well as a similar arrangement like SEZ is being developed for Dharma LNG.
  • 2 mIllion tonnes expansion from next year.
  • Potential waterfront development income excluding Dharma will be near INR 2400 crores.

Forecasts and Expectations:

  • APSEZ is expecting to handle around 9 million metric tons of crude for HMEL this year.
  • In H2FY18 APSEZ is expecting to grow at 1.5 times the growth rate of Indian export.
  • APSEZ is expecting a growth of 30-35% in volumes at Kattupalli this year.
  • Expected to increase the EBITDA margin to 70% in FY ’18 against 69% in FY ’17.
  • Cap-Ex will be in the range of INR 2500 crores to INR 2800 crores.
  • Cap-EX in the first half has been INR 1100 crores.
  • Net debt to EBITDA would continue to be below 3% or 3xmark.

Strategies:

  • APSEZ has focused on reducing Cap-Ex and ensuring higher cash flow in FY ’18.
  • Growth of APSEZ is synced with Indian export growth.
  • Focus on strengthening the balance sheet.
  • Adani is looking to provide rewards to shareholders as early as march.
  • In the container segment 1.5 to 2 times, and the rest cargo will follow the same pattern as before.

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