Essar Ports’ profits soar by 73% - expansion well underway
Essar Ports faired remarkably well in the last quarter and the company is all set to complete its expansion projects for enhancing capacity from 88MMTPA to 158 MMTPA
Essar Ports Limited (EPL), part of the Essar Group reported an impressive profit escalation of 73 percent for the first quarter from $ 7.6 million to $ 13.2 million. One of the largest port companies of India, its capacity enhancement program to raise throughput from the current 88 MMTPA to 158 MMTPA is fast nearing completion.
While much of the cargo handled is captive however, there has been revenue from 3 party customers contributing for around 4% to the total revenue of the company during the quarter. Once the capacity enhancement program is complete by around 2014 the revenue from this merchant cargo will have increased to 25%. In this quarter, the company has been able to reduce its debt by $ 31.7 million.
Rajiv Agarwal, CEO & Managing Director, Essar Ports Limited said, “87% of our committed capital expenditure has been completed and we expect the projects to be completed in phases by 2014. In line with the commissioning of the expansion projects, our earning and profitability will continue to grow”.
For the quarter ended June 30, 2012, Essar Ports handled 12.65 million ton of cargo compared to 11.20 million ton in Q1FY12 registering an increase of 13%.
Essar Ports has two operational ports at Hazira and Vadinar. The Hazira port is an all-weather, deep-draft port with 30 MMTPA of dry bulk and break bulk cargo handling capacity. Vadinar also an all-weather, deep-draft port has 58 MMTPA of liquid cargo handling capacity.
Essar Ports is currently developing two terminals at Paradip comprising of an iron ore berth of 16 MMTPA and a coal berth of 14 MMTPA. The company is also setting up a dry bulk terminal at Salaya with a capacity of 20 MMTPA. Additionally, the company plans to expand its Hazira port capacity by 20 MMTPA taking its capacity to 50 MMTPA.
Hazira on the West coast of India handled 3.58 million ton of cargo during Q1FY13 compared to 2.79 million ton in Q1FY12 registering an increase of 28%. Hazira handled 2.55 lakh ton of third party cargo in Q1FY13 and contribution of 3 party revenue was 8% in total revenue generated by the terminal. Hazira also won GreenTech Safety Silver Award 2012 for outstanding achievement in safety management.
Vadinar also on the West coast handled 9.07 million ton of cargo during Q1FY13 compared to 8.41 million ton in Q1FY12 registering an increase of 8%. Vadinar terminal handled 1000 ship at its product berths during Q1FY13 and the terminal won the prestigious Gold Award for Occupational Health & Safety from The Royal Society for Prevention of Accidents (RoSPA), UK.
Paradip Coal berth project which is to come up on the East coast of India recently received the final Forest Clearance from Ministry of Environment & Forest; construction is expected to commence shortly and completed in 24 months. Construction work for the iron ore terminal at Paradip is progressing well with 94% of project already completed and the terminal is expected to be commissioned in 2 quarter of current financial year.
Progress of the construction work of the Salaya project is good with all the important equipment like ship unloaders, ship loader, etc., have been delivered at the site. Berth is close to completion, stack yard is operational and conveyor construction is in progress.