Adani Ports and Special Economic Zone plans to repay Rs 5,000 crore in debt by the next financial year 2023-24, the company's whole-time director and Chief Executive Officer Karan Adani said in a statement on February 7.
"We are considering total loan repayment and prepayment of around Rs 5,000 crore, which will significantly improve our net debt-to-Ebitda ratio and bring it closer to 2.5x by March 2024," Karan Adani said in a recorded video message.
Adani Ports and Special Economic Zone's announcement to reduce debt in 2023-24 has emerged at a time when the entire Adani group has been plunged into a crisis following a report by US-based Hindenburg Research, which alleged gaps in the group's financials, high debt burden, and overvaluation.
ALSO READ: Adani Group fiasco: Five lenders and their exposure to crisis-ridden conglomerate
The result has been a collapse in the share prices of the group's companies, which forced the group to cancel its Rs 20,000-crore follow-on share sale.
Karan Adani added that besides the debt reduction, Adani Ports will also be looking to invest Rs 4,000-4,500 crore as capital expenditure in 2023-24.
The capital expenditure will be mostly used for the expansion of Adani Port's Mudra Port.
Adani Ports will also look to increase its earnings before interest, depreciation, tax, and amortisation (EBITDA) in 2023-24 to Rs 14,500 - Rs 15,000 crore in the next financial year, Karan Adani said.
This is against Rs 12,200 crore to Rs 12,600 crore guided for FY23.
APSEZ’s net debt-to-Ebitda ratio is well within the guided range of 3-3.5x, while the gearing ratio is below one, the company statement said.
Adani Ports on February 7 reported a 12.94 percent decline in consolidated profit to Rs 1,336.51 crore for the third quarter ended December 2022.
The country's largest integrated logistics player had clocked a consolidated profit of Rs 1,535.28 crore a year ago, according to a regulatory filing.
Its total consolidated income increased to Rs 5,051.17 crore in the December 2022 quarter from Rs 4,713.37 crore in the year-ago period.
The company's total expenses in October-December 2022 rose to Rs 3,507.18 crore compared to Rs 2,924.30 crore in the year-ago period.
As per the average of brokerage firm estimates taken by Moneycontrol, revenue was seen rising 25 percent on-year to Rs 4,753 crore, while net profit was estimated to increase 11.8 percent to Rs 1,647.1 crore.
Karan Adani added that the company has concluded the transactions of Haifa Port, IOTL, ICD Tumb, Ocean Sparkle and Gangavaram Port, and is progressing well on transitioning its business model to a transport utility.
The company, in a statement, said it has handled 252.9 MMT (million metric tonnes) of cargo in the first nine months of the current fiscal.
"The performance across various debt covenants has been better than the desired levels. We have an impeccable track record of fulfilling our debt obligations, and our internal accruals enable us to meet the scheduled debt repayment for any of the financial years without any major challenges," Karan Adani said.
The company said its return on capital employed (RoCE) was continuously improving at matured ports with better capacity utilization and given the focus on efficiency.
It added that RoCE of logistics business more than doubled vs. FY22. Operational ramp up at ports acquired in the last few years will drive their ROCE to 20 percent, it added.
Since the release of the Hindenburg report on January 24, Gautam Adani's conglomerate has erased around $117 billion in market cap, one of the worst in history. This is almost half of the group's combined market value.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
