- Total Revenue from operations stood at Rs 1411 crores for the quarter ended Dec 31 2016. This is an increase of 6%.
- The volumes have grown both in MTO & CFS businesses
- EBITDA for the quarter was 99 crores, which is a decline of 13%, this was mainly due to cost arising from rentals from Kolkata CFS, which is yet to start & also for expenses incurred in Q3 FY17 for managing the CFS at Mundra
- Q3 saw a slowdown in logistics & shipping business, as there were no new projects that really took off ground.
- The company has considered moving away from lower ROC business & selling of hazard assets
- In Q3 the company sold ship which was more than 25 years of its effective life & one ship was under repair.
- There has been transfer of similar business to ACCI due to the IndAS this is reflected in PAT by way of JV accounting. All these factors affected company’s P&L for the quarter
- PAT was 49 crores a decline of 10%. This was mainly because of deferred tax impact on account of IndAS guidelines.
- Net Worth as on Dec 31 2016 stood at 1894 crores.
- Net Debts stood at 259 crores
- Consolidated Return on capital is at 14%.
- Last year, the company the company had announced buyback to reward shareholders. The buyback was completed by January at price of Rs 195 per share. The total buyback size was 64 lakh shares that translate to approx. 2.54% of total number of share outstanding. The total amount of buyback was 124.8 crores
- There is Other Income of 18.27 crores which includes Dollar to Euro translation income & other income rentals & other miscellaneous & unclassified spread in income
- There is other comprehensive income which is below net profit which is the share in JV & associates. This is because of new IndAs, which has to be shown separately
- The company has not able to find out why MTU realization are dropping. The company believes that this phenomenon is temporary & as freight rates start kicking back the company will reap the benefits of the freight rates.
- ICD volumes for the Quarter have gone up 13% to 9035 TEU’s
- Earlier, all the expenses incurred till the facility commenced operation was capitalized, but as per the new accounting standards and in line with the generally accepted accounting principles, the lease rental paid to the Kolkata port has been debited to the revenue expenses and not capitalized, and for the 9 months ended December 2016 the amount is close to 3.5 Crores, and that has been accounted in this quarter as expenses.
- Decline in EBIT is of 8 crores out of which 3.5 crores is on account of rentals to Kolkata port & 4.5 crores on account of expenses for Mundra CFS.
- The board has given in principle approval of acquisition of 49% stake in terminal & combined volume of both the ICD which are growing i.e Kheda & Dadri that is 9000 TEU
- There is slump sale where in all the business of CFS Transindia Logistic park is taken over by Allcargo. The deal numbers is not included in current quarter as the transfer will be effective from 01/01/2017
- The CFS volumes have gone up but no increase in revenue due to cost of rentals & other expenses which are as per Ind As for Kolkata is under setup & there is no revenue there. That is the reason cost has gone up
- Utilization of crane & equipment during the year is 90% upwards
- Kolkata has approximately 4 CFS & all of them are small size. The Port volumes have been increasing by approximately around 20% in last 2 years. The port activity has been improved because BSA has taken over the operations and maintenance of the port at Kolkata, so the company expects that the volumes should continue to rise. This would increase approximately 65-70% of company capacity.
- Indian logistics market size is around 130 billion and is expected to grow by 300 billion by 2020.
- It contributes to 5 – 6% to GDP & has been growing at CAGR of 11-12%
- Government has introduced for a selected few importers direct port delivery or commonly called as DPD to improve port clearance
- DPD has become a new segment of business. DPD has introduced a new mix of business for CFS. Presently DPD volume is in range of 5% of the imports at JNPT & right now DPD is only at JNPT
- The government has focused on infrastructure development in the budget & with GST implementation it is a positive step.
- The government has taken decision to improve ease of doing business & came out with new customs regulations in which the ports have been asked to give deliveries directly from the terminals instead of putting it into the CFS. But what the company has seen in recently is that most of the cases the volumes have not been able to be delivered at the terminal because the process with which the trade works is different.
- The trade requires in many cases that call should be made of credit terms, the original bill of lading, the clearing process, the factories or the trading houses to have their own storage facilities, these issues have come up from the customer end.
- Right now the volumes are only 5% but the company says it will have to wait & see how industry adapts to this new policy.
Impact of Demonetization
- Demonetization has been a disrupter for the business
- It did affect the company as a logistic player during the quarter as it was completely B2B. Also for clients it did impact & this may cascade down to company
- The Total Capex incurred for 9 months is 167 crores. This inlcudes:
- Cost for dry docking of ship - around 4 crores.
- Addtion of a crane of 600 tonnes at 31 crores,
- JNPT additional expansion is 43 crores
- For Kolkata till date the expenses incurred are 31 crores & thereafter other maintenance Capex are pertaining.
- For full year it will be less than 200 crores
- The company is world leader with a global network covering over 80% of the world.
- The company operates out of 300 offices in 164 countries.
- Volumes have grown by about 14% Y-o-Y
- Revenue stood at 1206 crores, a Year on year increase of 11%
- EBIT for the Q3 was 42 crores. The ROCE was around 28% in this part of segment of business
- The company’s aim is to continues to maintain global market leadership & focus on growth & strengthening network across all the markets
CFS & Project & Engineering
- The company started with CFS & ICD operation & CFS expansion is well on track.
- The company is still waiting for final approvals from Indian railways for logistics park in Jhajjar
- DRFC on the western corridor is expected to be ready by 2020, so the Jhajjar project is in line & it is dependent of course in the future on the DRFC.
- The setting up of CFS at kolkatta is on track & expect to start operations by 1st quarter of next financial year
- The company has started managing operations of facility at Mundra & this is an asset light model. The company has leased out 40 acres & expecting numbers to be ramped over the coming months.
- This facility at Mundra will not only add to the volume numbers but will also help in the P&L.
- In Q3 volumes grew by 14% Year on Year to 75787 TEU’s & this is from all the 5 facilities including new Mundra facility.
- The volumes of the two ICDs, which are Dadri and Kheda for the quarter, grew by 13% to approximately 9000 TEUs
- The revenue for the quarter grew by 1% to 111 Crores and the EBIT for the quarter was at 32 Crores, a decrease of 17%. This was mainly on account of lower dwell times which was seen CFS business, rentals booked for the upcoming CFS at Kolkata as per the new IndAS guidelinesand the expenses of managing the CFS at Mundra in Q3.
- The return on capital employed was 32%.
- The company bought high tonnage crane of 600 tonnes this quarter against long term contract with a large MNC. Continued slowdown seen in the business
- However in the past 2 months the company has seen order book developing & there is good traction & expect to close 2 or 3 contracts shortly
- The company's equipment leasing business continues to do well, in the shipping business the company sold one ship that was around 25 years old & may sell one more.
- One of other ship is under repair & maintenance last quarter due to engine failure. This ship was out of business for last 2 months & expect this vessel back in sailing shortly.
- All the above factors contributed to a decline in revenue & profits from the shipping business
- Revenue for the quarter was 111 Crores, a decline of 21% and the EBIT was at 5 Crores as against 7 Crores
- The company will continue focus on increasing our market share in CFS, ICD, and P&E business by opening new offices in geographies to increase footprint and scale alongside increasing our product offerings