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Essar Ports reported a consolidated net profit of Rs 90.80 crore in the March quarter, down 1.4 percent from same period last year due to increased expenses and higher finance costs.
Even the rise in total and other income was unable to rescue the company. Essar Port's consolidated total income stood at Rs 663 crore in the quarter ended March, up 71 percent from same period last year, while its other income jumped to Rs 28 crore from Rs 9 crore last year.
"Our revenues increased on account of higher contracted volumes from anchor customers," managing director and chief executive officer Rajiv Agarwal said at the post earnings conference call today. Excluding the other income and trade revenues for fulfilling export obligations, the company's consolidated total income is flat on a year-on-year basis.
The company's total expenses bloated to Rs 431 crore in the period under review, up 176 percent from corresponding period last year. Tax expenses surged to Rs 16 crore from Rs 1 crore last year, while finance cost escalated almost 5 percent to Rs 152 crore.
Due to this, Essar Ports' profit at operational level was up less than one percent at Rs 232 crore on year-on-year basis.
Going ahead, the company plans to focus on completing its projects at Paradip, Vishakhapatnam, Hazira and Salaya and currently has a total debt of Rs 5,836 crore as on Mar 31.
The company is also banking on increase in revenue from the third party once its projects attain completion.
"Once the Salaya and Paradip projects are onstream there will be an increase in the third party cargo share, said Agarwal. Simultaneously, upgradation of Vizag iron ore terminal will also contribute to third party revenues which is scheduled from July this year, he said.
Essar Ports intends taking the third party revenue share to 30 percent by FY17 from less than 10 percent now.
The delayed Salaya bulk terminal is scheduled for completion in April 2015 and is a Rs 1,500-crore project for which Rs 1,000 crore has already been spent.
The Paradip coal terminal construction is expected to start soon as Supreme Court has dismissed all the petitions filed by port users occupying the land during December 2013, Essar said in a statement. Paradip Port Trust has initiated action to vacate the land earmarked for the terminal, it said.
"The Paradip project has not incurred any costs so far since it was stuck for environmental approvals. It is expected to be operational by June 2016,"Agarwal said.
The company has also received final environment clearance for Hazira expansion in bulk, it said.
