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Ruias-controlled Essar Ports on Monday said it has completed its Rs 28 billion planned investment in its Vizag and Salaya terminals. The company will now look at further investments to take its capacity further to 150 million tonnes per annum (MTPA) in the next two years time.
“Essar Ports Limited said that its investment of over Rs 28 billion in its Salaya and Vizag terminal projects has the potential to increase the company’s revenues by 30% in financial year 2018-19 on the back of third-party cargo growth,’ the company said in its press statement.
With the current investments made, the company expects its operational capacity would stand at 110 million tonnes per annum in the current calendar year. In addition, the company will also look at further expansion opportunities.
“Looking at the opportunities in the sector, it cannot be that we will not look at more investment opportunities. We have plans to expand at Hazira, we have plans to expand at Salaya and looking at a coal terminal project in Mozambique, and in all looking at an investment of $500 million in the coming years in these projects,” said Rajiv Agarwal, chief executive officer for Essar Ports. He added the investment could be higher than $500 million.
The company said further plans for setting up new facilities to handle dry bulk, liquids and liquefied natural gas (LNG) at Salaya is at a stage of approval. These plans are expected to entail an investment of Rs 50 billion–Rs 100 billion.
The company added its last investment cycle of Rs 28 billion is now complete. Of the Rs 28 billion, the company invested close to Rs 20 billion to develop a dry-bulk terminal at Salaya and another Rs 8.3 billion for upgrading the iron ore handling capacity of the Vizag terminal. With these expansions, the company said, it expects total revenue to increase by 30% in the next financial year. In terms of cargo handled, the company expects a 35% growth in the current financial year.
Agarwal added the company expects to report revenue of Rs 13.50 billion in the current financial year and earnings before interest, taxation, depreciation and ammortisation (Ebitda) of Rs 9 billion. “We expect Ebitda to increase to Rs 13 billion in the next financial year,” Agarwal said. On a net profit basis, the company expects to report a net profit of Rs 3.2 billion in 2017-18, against Rs 2.5 billion reported in the last financial year. However, the profit for the last financial year will also include net income from the Vadinar port facility which was sold to a Rosneft-led consortium in August 2017.