Aegis Logistics Q2FY18 Concall Summary

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 Financial Highlights

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  • Total revenues in Q2 FY18 were Rs. 1,241 crores versus Rs. 677 crores year earlier, that is a rise of 83%.
  • Total segment EBITDA for the quarter was Rs. 76.87 crores versus Rs. 55.74 crores year earlier,that is a rise of 38%.
  • Profit before tax was Rs59.52 crores vs 39.4 crores earlier , that is a rise of 59%.
  • Profit after tax was Rs. 55.96 versus Rs. 27.52 crores a year earlier, that is a growth of 103%.
  • Profit after tax after minority interest wasRs. 52.06 crores versus Rs. 24.96 crores year earlier, that is a 109% increase year-on-year.

Segment analysis

Liquid terminal division

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  • Revenues for Q2 FY18 were Rs. 40.79 crores versus Rs. 37.12 crores year earlier, that is a rise of 10%.
  • EBITDA was Rs. 26.29 crores versus 21.19 crores, a year earlier that is a rise of 24%.
  • The main reason for this healthy rise is particularly Haldia terminal in Bengal

Gas terminal division

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  • Revenues for the quarter wereRs.1,200 crores versus Rs 639 crores year earlier, that is arise ofvrores
  • The EBITDA for the quarter wasRs. 50.58 crores versus Rs 34.55 crores year earlier a big jump of 46% in the gas terminal EBITDA.

LPG Volumes analysis

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  • The LPG throughput volume handled in Q2FY18in all our terminals were 441,532 metric tonnes versus 252,254 metric tonne year earlier, a truly stunning rise of 75% year-on-year.
  • This has been one of the main factors driving Q2 FY18 earnings.
  • The Mumbai and Pipavav we therefore has record volumes
  • Haldia LPG volumes will start appearing from Q3 FY 2018
  • The sourcing volumes for the gas are also up in a stunning number, Q2 FY18 was 352,902 metric tonnes versus 203,649 tonnes a year earlier showing a growth of 73% in sourcing volumes for LPG
  •  Packed LPG cylinders sold 3,342 metric tonnes versus 3,345 metric tonneser
  • Bulk industrial sales were 7,754 metric tonnes versus 5,674 metric tonnes year earlier, a rise of 37%
  • Auto gas sales for the quarter was 6,344 metric tonnes versus 5,664 metric tonnes year earlier that is a rise of 12%.
  • 107 auto gas stations operational.
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Piparav operations

  • Liquid terminal is still around 20% to 21% capacity utilization
  • With Kandla project coming up, we would be focusing on in Gujarat- shipping lines
  • The company contines to work with Gujarat Piparav port on the railway gantry, etc
  • In future, the company plans to bring petroleum by rail, but this is not completely resolved

Company Outlook

  •  Bigger revenues expected in liquid terminal division in Q4FY18 as new Kandla liquid terminal with capacity of 100,000 kilo liters will start.
  • Haldia, with extra capacity of 35,000 kiloliters, is expected to start contributing by Q1FY19 to revenues and earnings
  • BPCL has already started bringing cargos
  • In gas division, completed the additional 10,200 metric tonnes of expansion in Piparav
  • Greater revenues and earnings from LPG expected because of Pipavav expansion and Haldia expansion.
  • The company continues to work on completing necklace of terminals in the next three years by FY2021
  • For Haldia LPG terminal, the demand would be more than expected levels
  • Piparav- 10,200 metric tonne expansion, which could increase the LPG throughput by 800,00 tonnes

Capex

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  • The company continues to work aggressively on completing the necklace of terminals.
  • Two more projects coming up after the Haldia project. One has reached the negotiation stage, the other one is still in initial stage
  • One is in West Coat of India
  • 100,000 kiloliters liquid terminals in Kandla coming up
  • Haldia 25,000 kiloliters
  • Expansion  still going on in Mangalore
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Industry outlook

  • Imports is expected to increase from 11 mllion tonnes last year to 20 million tonnes in 2035
  • Domestic supply will also increase, but slower than the domestic supply
  • Aegis would cater to the increasing demand, and would try to fill the gap covered by imports
  • Ramping up occurring in Haldia and Piparav, and better results are expected in next quarters

Updates on pipelines

Uran Chakran pipeline

  • The company has completed its part in December 2016
  • The company is waiting for HPCL to complete its part, expected by March 2018
  • After that, the company can start moving LPG at the HPCL request through that very large pipeline.

Durgapur pipleline

  • IOCL started the work there

Updates on tenders

  • No new updates
  • In 2017, the company has beaten the forecasts- the LPG demand is higher

Non-cash tax write-back

  • Benefit for only the FY 2018
  •  Next year, will return to the P&L basis

Change of auditors

  • No specific reason; Company norm

Competitors

  • There are LPG traders, whoever is on the list registered with IOC, HPCL, BPCL
  • Joint venture company with the Japanese called Aegis Group International from Singapore,make Aegis competitive
  • Normal international LPG traders who are the company’s competitors

Updated on Dividend

  •  Company is planning to provide soon- interim dividend plus final dividend

ITOCHU funds

  • Deal almost completed

Effect of price changes

  •  The company charges the service fees from the oil companies, on the basis of amount per tonne figure
  • It depends on the type of customer- range of 800-1000 Rs per tonne
  • It does not get affected by the change in prices by the oil companies

Updates on Reliance

  • Reliance may be considering changing its input feedstock- status quo

Updates on Gujarat Piparav port

  •  APM Terminals group may be considering divesting their stake in Gujarat Piparav port- No such plans at present
  • If it happens, it will have no impact on the business of Aegis

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