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FY17 was a transformational year for the company. Towards the beginning of last year, we successfully restructured our business to focus on 4 key verticals - Dredging, Shipping (Oil Tankers), Coal and Oil and Gas. Today, we have evolved into one of the largest private sector dredging companies in India with a strong technical skill set and is well poised to gain from the government initiative on National Water Highways.
We have successfully moved from a cyclical business cycle to a more annuity type business with a strong visibility on earnings. Our Tier 1 Oil and Gas Assets are developing well and would significantly enhance our earnings profile in the near future.
With the business restructuring in place, it had been a busy year for your company as we continued to strengthen our skill set in each of our four key areas of operations. We are now strategically well positioned to benefit from Government of India''s strong focus on water infrastructure. At the same time, our well- diversified business portfolio is now significantly der-risked and provides a much higher visibility on earnings.
The Government of India''s vision to make India a global transshipment hub, along with the announcement of certain large dredging projects, reflects the high potential of the Indian dredging market and we are looking forward for the changing scenario. Our extensive experience has helped us bid profitably and complete the contracts awarded. We have secured a 3-year contract from New Mangalore Port Trust for about Rs, 98 Crores, DGNP Vizag for Rs, 39 Crores L1 and other port contracts worth Rs, 15 Crores. We are also strategically considering Inland water dredging and are in active discussion for the same. We, at Mercator operate a diverse dredging fleet which helps us select the appropriate equipment for different maintenance dredging projects accordingly. We emphasize on preventive maintenance in order to reduce the downtime and enhance the vessel''s life.
Our assets in the shipping segment look attractive and we are constantly evaluating options to acquire new assets on an asset-light model basis. This ensures long term success and stability. In these challenging times, effective fleet utilization with cost optimization is the key for better earnings and we are proud to report that your company has built world class operational and technical capability. From the business development front, we have secured a time charter contract of around Rs, 120 crores for our MR tanker for a period of 4 years, commencing in January-2017. The 2-year time charter we were engaged in with VLCC was completed in December 2016 and the vessel has been deployed on spot rates from January 2017 onwards. Currently the focus of your management is towards operational efficiency, maintenance of our fleet & strategic capital allocation to create superior shareholders return.
Further, Mercator Petroleum Limited (MPL), our subsidiary company, has recommenced its exploratory drilling activities post receipt of retrospective extension from DGH. Commercial feasibility of the block has since been reviewed and approved by the DGH. The Company shall now test the exploratory wells already drilled and complete the drilling program within the current fiscal year. The company expects to commence commercial production during 1st half of FY 18 and will contribute significantly to the profitability of the group. These are Tier 1 Oil Assets and the crude is light sweet (41 degree API), thus ensuring that no major processing is needed before selling it; and also ensuring that it receives a good premium. The assets are also located under 20 kms from the closest refinery, thereby ensuring that no major evacuation infrastructure is needed.
In March 17, we have also achieved an all-time monthly high in crushing, dispatch and third-party loading quantity of coal. The EBIDTA for coal has increased by 82% compared to quarter ended 30th June 2016. Hence, we can fairly conclude that all the 4 Verticals are self-sustaining and will contribute significantly towards the top line.
We have successfully completed our QIP issue, which was fully subscribed by marquee Qualified Institutional Buyers and also has helped to increase our net worth. Necessary resolution is being placed at the ensuing AGM for your approval to enable the Company to raise funds up to $50 million by way of issue of securities/Foreign Currency Convertible Bonds through QIP/ADR/GDR or any other method in India or abroad. This should help the Company to replace its high cost funds as well as for other permitted uses including expansion. In another interesting development, your Company''s sale transaction of MOPU was successfully completed in February 2017. From the proceeds of this sale, we were able to repay approximately Rs, 500 Crores of outstanding debt. The company has taken steps towards re-financing subsequently reducing the high cost short term borrowings. Post sailing and commissioning of Sagar Samrat, the working capital debt of close to Rs, 120 Crores shall reduce. The group is in talks with various institutions for raising of funds by way of FCCB''s so as to effectively reduce the average cost of Debt. The Company''s long term debt now stands reduced by 34% from Rs, 2,139.35 crores to Rs,1,416.13 crores. Further, with more efficient management of working capital it is now lower at Rs, 425 crores. With this encouraging progress, our focus on deleveraging will continue.
During the year FY17, our consolidated revenue dipped by 21% to 2,115.39 crores from Rs, 2,706.75 crores in FY16. However we significantly lowered our expenses by a over 40%, from Rs, 3,807.31 crores in FY16 to Rs, 2,221.61 crores in FY17, thereby substantially increasing the Profit After Tax to Rs, 24.15 crores from loss of Rs, 880.98 crores in FY16. The board has recommended a dividend of 5% for the year.
We are committed on creating a world-class energy company with a strong focus on generating superior shareholders return. We are well positioned to benefit from the Government of India''s focus on port development and water infrastructure. Our strong skill set in Dredging and our large fleet strategically positions us in the current environment. We are focused on effectively deploying our assets on high margin and specialized jobs. Our Tankers and coal business continues to provide us stable earnings. Balance sheet improvement and deleveraging continues to remain our key focus area. We will also look at various strategic options to monetise our noncore assets to meet this objective.
Across our operations, safety, environment and health come first and we are strongly committed to ensure that our operations are safe and free of any risks or hazards. We employ best-in-class standards and ensure our teams have the correct capabilities and knowledge to be better prepared for evolving business challenges.
We would also like to take this opportunity to thank all our stakeholders for their immense support and commitment and we look forward to the same level of confidence. We are also immensely thankful to our board members and members of our leadership team for their continued guidance in our transformation journey. We are proud of the contributions of our dedicated and hardworking employees who are working relentlessly in our growth journey and for creating a great future for us.
H. K. Mittal Shalabh Mittal
Executive Chairman Chief Executive Officer