MEP Infrastructure Q3FY17 Concall Summary

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Quartely P&L Statement of MEP Infrastructure
9 Months P&L Statement of MEP Infrastructure

Key Highlights

  • Revenue for the Quarter was Rs 389 crores, EBIT 125.8 crores of& PAT of 0.9 crores
  • Revenue for 9 months was Rs 1297.45 crore corresponding to 1397 crores last year with EBIT of Rs 371.78 crores & PAT of Rs 96.68 crores
  • Toll Collection was suspended during Nov 9 2016 to Dec 2 2016, this has impacted the financials. Initiated the claim amount of 88 crores towards suspension of the toll collection. This has been done by recognizing operating revenue of 50 crores & adjusted against depreciation & amortization of 38 crores
  • Raised claims for relief in concession fee payable plus operating cost & loss on account of profit
  • Rebidding of long term toll collection project at the kalyan-shilphata road in Maharashtra for the period of 156 weeks which is 3 years post COD
  • Completed & handed over one of short term collections projects at surjapur in west Bengal
  • Nine short term projects which are one year projects, 3 year long term tolling projects, 3 OMT projects & 6 hybrid projects where construction has started.
  • Completed project tenure of Rajiv Gandhi Sea link on 1st February 2017 & currently under extension period
  • Awarded 6 hybrid annuity projects due to which the company continues to maintain a leadership position in the hybrid annuity space
  • Order book of Rs 3837 crores which translates into 12%
  • Due to maintenance of obligation on OMT projects like Hyderabad-Bengaluru, Mumbai entry point & Baramati the company has provided 23.5 crores in accounts
  • Concessional fee has been recognized as intangibles
  • Financial cost is reduced but there is also Ind- As adjustment
  • Total Debt is Rs 3018 crores. Standalone Debt for Q3 is 408.36 crore. For Q2 it was 428 crores

Hybrid Annuity Projects

Hybrid Annuity project of MEP Infra
  • Achieved financial closure for the 4 of our hybrid projects & in final stages of 2
  • Government has been encouraging on infrastructure development. The government has budgeted Rs 64,000 crore to be spent in the financial year for road sector which is 24% higher as compared to 2017
  • NHAI announced 10-15% projects more approximately 5000-5200 kms of road projects
  • As on December 2016 2678 kms have been awarded out of which nearly 40% have been under the hybrid annuity mechanism.
  • There is an order pipeline close to Rs 26,000 crore expected over a few months & company will strategically participate in few projects
  • The percentage of completion accounting method is followed for hybrid projects
  • Total amount of investment is 170-200 crores including that of combined JV partner
  • The Hybrid projects are bagged as joint venture between Spanish company. The projects require the company to bring in 74% equity & remaining 60% in balance
  • Interest Rates were around 11% or just under 11%
  • Company’s board has approved a rights/preferential issue infusing an adequate amount to which allows for 6 to 12 months for hybrid projects
  • EPC of close to 3000 plus crore for all the projects
  • Expected EBITDA margin of 12-14% for Hybrid projects
  • 24 Hybrid projects available in public domain. Bidded for few & expect at least 6-8 projects

Toll operate transfer model

  • 75 tolling projects of approximately 4500 kms in length has been identified under TOT model with concessional period in excess of 25 years
  • Government is expecting to raise funds under TOT of approximately Rs 80,000-10,000 crores in the next year or two
  • The first tranche of bidding from FII’s will be out by April