Essar Ports, which reported a nine per cent drop in first quarter net profit, sees better days ahead as the company hopes to take advantage of the long-term infrastructure financing policy announced by the government.

Rajiv Agarwal, Managing Director, said the outlook appears “bright” for the full year. The new policy for the infrastructure sector is expected to help the company to cut its debts (over ₹5000 crore as on June) and high financing costs, he said during a conference call announcing the company’s results on Wednesday.

As per the policy announced in the Budget, the RBI last week relaxed norms for banks to raise long-term funds for financing infrastructure projects. The policy initiatives and the better economic environment have brightened the growth prospectus for the port sector, he said.

One of the largest private port operators in the country, Essar operates three ports – Hazira, Vadinar and Paradip. Agarwal said expansion plans are on track with operations at Vizag terminal expected to start next quarter. The company, which mostly handles Essar group’s captive cargo, hopes to increase the share of the third partly cargo to five per cent next year and 30 per cent in the next three years, Agarwal said.

Results

The company’s net profit fell by nine per cent to ₹92.2 crore from (₹101.4 crore) in the same period last year. Agarwal said the drop in profit for the quarter was due to higher financing costs.

However, the profit was up by one per cent compared to the previous quarter. Revenues increased by five per cent to ₹431 crore.

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