Essar Ports Ltd has announced that its profits jumped 97 per cent to Rs. 80.5 crores in the quarter ended Sept. 30, compared to Rs. 41 crores reported in the year-ago period.The Ruias-promoted firm’s revenues saw an increase of 25 per cent to Rs. 348 crores in the second quarter against Rs. 279 crores in the corresponding period last year. Its earnings before interest, tax, depreciation and amortisation (Ebitda) margins stood at 82 per cent for the quarter. Ebitda was at Rs. 287 crores, up 24 per cent.
Mr. Rajiv Agarwal, Managing Director, Essar Ports, said the increase in revenues had been due to the ramp-up of capacities in group companies like Essar Steel Ltd and Essar Oil Ltd.
Meanwhile, Mr. Shailesh Sawa, Chief Financial Officer of Essar Ports, said the company had approached the Reserve Bank of India (RBI) to allow it as a special case to raise around Rs. 1,500 crores through external commercial borrowing (ECB) to part refinance its Rs. 3,645 crores loan. The company has made an application to the central bank in this regard as the bank eased certain rules for ECBs, he added.
RBI recently allowed manufacturing and infrastructure companies to avail of ECBs to repay their rupee loans if the companies have been a consistent foreign exchange earner for the last three years. Essar Ports does not earn its revenues in foreign currency and that is why the company has made a special appeal to the central bank for its nod.
Essar Ports availed of the take out financing scheme of the Government through India Infrastructure Finance Co Ltd and refinanced Rs. 405 crores of its debt for the Hazira Port in Gujarat. This has brought down its interest cost by 2.65 per cent for the stated amount.
Take-out financing is a method of providing finance for longer duration projects (say of 15 years) by banks by sanctioning medium term loans (say five-seven years).
The total debt on Essar Ports’ books as on Sept. 30 was Rs. 5,601 crores, of which a sum of Rs. 3,645 crores is the operating debt and the rest constitutes project financing. The current average interest rate for the company is 12-13 per cent.
It is also looking to refinance Rs. 200-250 crores debt at its Vadinar terminal in Gujarat through the take out financing route.
Essar Ports is undergoing a massive expansion to boost its capacity to 158 million tonnes (mt) by 2014-15. Currently, the company has a total capacity of 88 mt and a capacity utilisation of 60 per cent. Merely four per cent of its revenues came from third party cargo in the first half of the current financial year which the company looks to scale up to 25 per cent by 2014-15.
The Essar Ports scrip on Oct. 16 gained 0.31 per cent before closing trade at 98.50 on BSE, while the benchmark index ended at 18,577.70 points, down 0.73 per cent.
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