Adani Ports Q4 Results: Profit Jumps Fourfold But Misses Estimates
Mundra port. (Source: Adani’s official website)

Adani Ports Q4 Results: Profit Jumps Fourfold But Misses Estimates

Adani Ports And Special Economic Zone Ltd.’s quarterly profit jumped fourfold over the year earlier as its acquisition of Krishnapatnam port continues to drive volumes. Still, the earnings missed estimates.

Net profit of India’s largest port operator stood at Rs 1,287 crore in the three months ended March from Rs 334 crore a year ago, according to its exchange filing. That compares with the Rs 1,465-crore consensus forecast of analysts tracked by Bloomberg.

Its revenue rose 24% year-on-year to Rs 3,608 crore—against the estimated Rs 3,721 crore. Revenue of the ports business rose 30% over a year earlier to Rs 3,123 crore, the company said in the filing.

Adani Ports in October last year had acquired a controlling 75% stake in the all-weather, deep water port located on the east coast of India in Nellore district of Andhra Pradesh. It bought the remaining 25% stake in Krishnapatnam Port in April 2021.

Adani Ports’ cargo volumes in the reported quarter rose 27% over the year earlier, the filing said. Krishnapatnam port handled cargo amounting to 3 million metric tonnes in November and 3.5 MMT in December, it said. Krishnapatnam port handled 10 MMT cargo in the quarter ended March.

The cargo, according to the company, was higher than that handled by all the major ports in India, helped by 16% growth in container cargo, 9% growth in dry bulk cargo, and due to enhanced capacity and higher cargo in east coast. To be sure, all-India cargo volumes only rose 2% during the period.

Q4 Highlights (YoY)

  • Operating profit rose 39% to Rs 2,287 crore, compared with the Rs 2,376-crore forecast.
  • Operating margin expanded to 63.4% from 56.2% a year ago. Analysts had pegged it at 63.9%.

“FY21 has been a transformational year for APSEZ. Some of the key decisions we took this year have set the foundation for the coming decade,” Karan Adani, chief executive officer of Adani Ports, was quoted as saying in the filing. “Our market share increased 4% on a pan-India basis in the ports sector.”

Myanmar Port's Fate Uncertain 

Adani Ports also said it could abandon its container terminal project in Myanmar, bids for which it had won only last year, and write down the investment if it’s found to be in violation of sanctions imposed by the Office of Foreign Assets Control of the U.S.

This comes after a military coup in the Southeast Asian nation on Feb. 1 led to the deaths of hundreds of civilians, drawing international backlash and sanctions against the military leadership.

Adani Ports, which has already invested $127 million (around Rs 889 crore) in the project, said it’s in discussion with U.S.-based counsel Morrison Forrester to ensure compliance with OFAC and also plans to proactively approach OFAC to ensure it’s not violating the sanctions.

Outlook

  • The company expects volumes to range between 310 MMT and 320 MMT for the ongoing financial year, including 10 MMT of Gangavaram Port from Q4 FY22, a growth of 29%.
  • Consolidated revenue is pegged at Rs 16,000-16,800 crore for FY22. Port revenue pegged at around Rs 14,000 crore, while logistics revenue seen to be around Rs 1,400 crore.
  • It expects capex of around Rs 3,500 crore, including maintenance capex of Rs 500 crore.
  • The company has guided for free cash from operations to be around Rs 5,500 crore in FY22.

Shares of Adani Ports closed 0.87% higher before the results were announced, compared with a 0.94% drop in the benchmark Nifty 50.

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