Essar Ports saw a marginal fall in its net profit for the quarter ended March 31 to ₹90.8 crore, compared to ₹92.1 crore reported a year earlier.

Its revenue during the period, however, increased 5 per cent to ₹415.5 crore from ₹396.7 crore in the year-ago period.For the whole year, it clocked a 16 per cent increase in net profit at ₹383.7 crore and a 13 per cent rise in revenues at ₹1,637.4 crore.

The port handled a throughput of 52.24 million tonnes (mt) during the year, compared to 54.52 mt in FY13.

Billing for more cargo than what was actually handled has helped Essar Ports deliver a good set of financials for FY14. This becomes possible through “take or pay agreements”, which are long-term contracts with customers. The agreements ensure that customers make payments for minimum cargo handling.

“The financials were better as the billed cargo volume was 72.16 mt for 2013-14, against 52.24 mt handled,” Rajiv Agarwal, Managing Director, said.

In the current fiscal, Essar expects to bill 79 mt against an expected throughput of 75 mt. Most of these agreements are with Essar Group firms.

Project delays The company, which has been facing delays on its four port projects on account of regulatory clearances and land acquisition, expects to clear these hurdles and commission at least two of these in the current fiscal.

It has invested about ₹8,000 crore in these projects and will invest another ₹3,000 crore in the next three years.

The four projects together will increase the company’s handing capacity by 82 mt, including 16 mt from Paradip and 26 mt from Visakhapatnam.

Essar, which currently handles a negligible quantity of third-party cargo, expects to get 10 per cent of its throughput in the current fiscal from non-Essar Group companies.

“By 2017, we are targeting a 30 per cent share of third party cargo,” Agarwal said.

Related Topics