B Ravi, CFO, Adani Ports & SEZ says there has been no drop in the port margins as such and it has been a very steady quarter on quarter.
Contrary to popular belief, Adani Ports and SEZ managed to improve realization per tonne by about 10 percent, says B Ravi, CFO, Adani Ports & SEZ. He expects this trend to continue.
He says there has been no drop in the port margins as such and it has been a very steady quarter on quarter.
Adani Ports and SEZ Ltd reported 24.76 percent growth in consolidated net profit at Rs 450.51 crore for the quarter ended December 31, largely due to nearly 5 times rise in its other income amid flat sales and increased costs.
Below is the verbatim transcript of B Ravi's interview with Sonia Shenoy and Anuj Singhal on CNBC-TV18
Anuj: Decent numbers for you but the market is worried about realizations, they have gone down this quarter. Is it a one off or do you think realizations would settle at this quarter’s level?
A: On the contrary realizations have been better, we need to put those numbers in the right perspective, we had certain SEZ revenues in the corresponding quarter. As you know it is a lumpy business. So we had about Rs 128 crore in Q3 last year and that not being there if you really put that out in terms of realisation per tonne they actually have improved almost by about 10 percent. It was around Rs 363 which is one of the highest in terms of per tonne realizations. We are doing very well and this trend is likely to continue because we have high contributors of coal, crude and containers as a big share of the entire cargo. So actually the realizations are very robust.
Sonia: But your core margins have fallen, they have moved to 67 percent versus 75 percent earlier. Do you think that deceleration may continue?
A: No that is also because of the SEZ only. It is something like when you have an SEZ income the total operating profit including the SEZ income would actually go up to 75 percent. If you see only the ports which is a very steady growth which we have been having far higher than the other ports, if you see that then it was 70 percent last year and it is almost the same this year too. So there is no drop in the port margins as such and it has been a very steady quarter on quarter also and that has been maintained like this for the last four-five years at this point. So it is going very steadily on that.
Anuj: You had other income of Rs 172 crore versus Rs 35 crore, if you could explain where did this other income come from?
A: As compared to last quarter, this quarter we have had certain surpluses which we had invested in various places and we have had interest income which has added much more than what was there in the previous quarter. So this other income is mostly all related to interest income. We have huge surpluses in our balance sheet.
Sonia: A word on your guidance as well, nine months your volume growth stands at about 75 million tonne so will you be able to achieve full year guidance of 100 million tonne?
A: We are trying very hard towards that to reach that magical number and the way we are going we might just about make it. Without giving any guidance I think we are expecting that we will be able to touch that.
Anuj: The market wants to know what do you intent to use your cash for, you are sitting on large amount of cash and that really is going to be the next catalyst for the stock. Is there anything that you have decided or you are mulling at this point?
A: Yes mulling for sure. Not yet decided in terms of where it would be immediately given but we have been looking at opportunities both on east and also on the west in terms of both green field and acquisitions. And I think it could be a matter of time by which this would be realised and therefore the cash would be utilized towards that mainly.Are you happy with your current monthly income? Do you know you can double it without working extra hours or asking for a raise? Rahul Shah, one of the India's leading expert on wealth building, has created a strategy which makes it possible... in just a short few years. You can know his secrets in his FREE video series airing between 12th to 17th December. You can reserve your free seat here.