High foreign currency debt is not a major concern for Adani Ports as it has a natural hedge due to marine and container income.
Adani Ports and SEZ reported decent set of numbers during June quarter on improved cargo volumes. It reported 51 percent year-on-year jump in profit to Rs 418 crore, total income also increased around 78 percent to Rs 1568 crore.
Read This: Adani Ports Q1 net up 51%, rev up 78%
In an interview to CNBC-TV18, B Ravi, CFO at Adani Ports said that cargo volumes grew by 35 percent year-on-year.
The firm handled 2667 MMT cargo on consolidated level. The cargo handled by Dahej port rose 24 percent to 2.22 MMT. Hazira port stood at 0.87 MMT , beginning its journey to be a large diversified port, adding to the overall Adani Ports' synergy. The progress at all other ports in Goa, Vizag, Tuna Tekra are on schedule, the firm said in a statement.
On forex loss that the company incurred during the quarter gone by, Ravi said high foreign currency debt is not a major concern. “We have natural hedge due to marine and container income,” he said.
Below is the verbatim transcript of B Ravi's interview on CNBC-TV18
Q: Your performance is so much better than what the sector is doing. What specific sectors drove the kind of cargo volume growth that you witnessed?
A: The results that we announced is the combination of both the ports business and the Special Economic Zone (SEZ) business and both have done well in this quarter. The cargo itself has grown by 35 percent at 23.59 million metric tonne (MMT).
We have now become the number one commercial port in India and have just surpassed Kandla Port. So that has been a very significant contributor to the entire top-line as well as the bottom-line. Along with that, from the SEZ income every year we are having about Rs 400-450 crore.
In the last quarter too we had about Rs 200 crore and this time also we had upwards of that. Therefore, a combination of the ports business and the SEZ business together has led to a very significant increase both in the top-line as well as in the bottom-line.
Q: There is some talk that the Shipping Ministry is looking to deregulate tariff at the major ports. Can you just update us on that?
A: On Thursday, there was news that there has been a lot of buzz both for regulating the non-major ports and now reregulating the major ports. It is a step in the direction which the government has been thinking for a while. More importantly, they are now talking about increasing the performance at various ports.
What we have been doing continuously is that we have priced it with the market and with our efficiencies, we have actually attracted a lot more customers and therefore, the cargo volume and it is just a step in the right direction.
Q: What about your debt situation? While your performance is good, you have a fairly large unhedged debt position, around Rs 7,500 crore of forex debt. Does that make your balance sheet vulnerable given what is going on in the currency market?
A: No. We have a natural hedge both in terms of the marine income that we have as well as the container income. Therefore, the debt which we have on books in terms of whatever servicing we can do both for the interest as well as the repayment in the years to come, is less than our natural hedge and is therefore, not a matter of concern.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.