Adani Ports on Tuesday reported consolidated net profit at Rs 1,315 crore, down 16% on-year as opposed to the expectation of a 25% growth for the quarter ended 31 December 2022. The company’s net revenue for the quarter also failed to meet street estimates. Revenue for the Dec quarter came in at Rs 4,786 crore, up 17.5% on-year from Rs 4,071 crore reported in the same quarter a year ago. The Q3 earnings come amid Adani group-Hindenburg Research row, which has wiped off $120 billion or 50% of the combined market capitalisation of Adani group companies. Adani Ports shares recovered as much as 26% from its lows despite a downgrade by S&P Global Ratings to negative from stable.
Adani Ports was expected to report 24-25% on-year growth in net profit for the quarter ended December 2022. Brokerages expected Adani Ports to report around 30% on-year rise in revenue. EBITDA was expected to rise 24-28% on-year, and EBIT margin seen at 60-63% for the quarter. According to analysts, subdued container volume was expected. The quarterly numbers were expected to see the impact of lower volume and higher operating companies. Analysts at Philip Capital assumed an effective tax rate of 17% in the third quarter against 9% in the September quarter.
Highest ever revenue, EBITDA over a nine-month period
The company reported an EBITDA of Rs 3,011 crore for the October-December period, up 15%, compared with Rs 2,612 crore in the same quarter last year. It expects full-year revenue to be in the range of Rs 19,200-19,800 crore and EBIDTA at Rs 12,200-12,600 crore for FY23. “With the highest ever revenue and EBITDA over a nine-month period, ASPEZ is well placed to achieve the upper end of its full-year revenue and EBITDA guidance provided for FY23,” said Karan Adani, CEO and Whole Time Director, Adani Ports and Special Economic Zone.
The company said its cargo volume rose about 1% to 75.43 million metric tonnes (MMT). Container volume rose 2%, the firm said. Easy cost volume and non-Mundra volume was up 7% each while west coast volume fell 2% and Mundra volume fell 4%. Adani Ports’ return on capital employed (RoCE) was continuously improving at matured ports with better capacity utilization and given the focus on efficiency, the company said, adding 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%.
Adani Ports FY25 Capex guidance in Rs 4,000 – 4,500 cr range
In its FY24 guidance, Adani Ports expects EBITDA to be in range of Rs 14,500 crore to Rs 15,000 crore. This is against Rs 12,200 crore to Rs 12,600 crore guided for FY23. The company expects capex to be in range of Rs 4,000-4,500 crore in FY24 against Rs 8,600 crore guided for FY24. The company also expects debt to EBITDA ratio to improve to 2.5 times from FY23 guidance of 3-3.5 times.
“Cash Surplus generated through operations during FY24 would be used to re-pay / pre-pay loans of Rs 5,000 crore, resulting in reduction of Net Debt to EBITDA ratio to ~2.5x,” Adani Ports said in a statement. With a port EBITDA margin of 70%, Adani Ports said it continues to be one of the most profitable port companies globally. The company handled 252.9 MMT of cargo, with 8% on-year growth. The growth in cargo volume was led by coal (23%), liquid (excluding crude) (8%) and containers (5%). The automobile segment, though a small proportion of overall volumes, also saw a 22% jump in volumes.