Adani Ports Q3 profit slips but exceeds market forecast; lowers FY22 revenue guidance

Billionaire Gautam Adani-led Adani Ports and Special Economic Zone Ltd reported a 5.7% drop in net profit for the three months ended December 2021, but avoided the 20-30% decline that analysts were expecting.

However, the company lowered its full-year FY22 revenue and EBITDA guidance.

Net profit for the quarter ended December 2021 stood at Rs 1,472.26 crore as against Rs 1,576.53 crore at the end of December 2020.

On a sequential basis, net profit grew 54% from Rs 953.84 crore at the end of September 2021. 

The company reported a year-on-year consolidated revenue from operations growth of 1.35% at Rs 3,797.10 crore, weighed by a drop in coal off-take. Overall, cargo volume stood at 68 million metric tonnes (MMT).

“Cargo volume was subdued on account of lower import of coal by key IPPs like Adani Power Mundra, CGPL and lower trading coal volume which was impacted due to higher commodity prices, disruptions in the supply chain and incessant rain in certain southern and eastern ports,” the company said in its investor presentation.

The company's shares closed at Rs 739.35 apiece on the BSE on Tuesday, up 3.24% from the previous close. The stock has touched a high of Rs 901 and low of Rs 500.20 in the past 52 weeks. The earnings report was announced after market hours.

Other Key Highlights

1) Adani Ports’ Q3 EBITDA stood at Rs 2,417 crore.

2) EBITDA margin fell to 63.7% from 71.9% in the corresponding period last year.

3) The company lowered its FY22 revenue guidance to about Rs 17,000 crore, from Rs 18,00 crore earlier.

4) EBITDA guidance lowered to Rs 10,600 crore from Rs 11,500 crore earlier.

5) Container share in the cargo basket segment (which accounts for 44% of company's revenue) increased by 465 bps during the quarter.

6) It outperformed cargo volume growth at 22% versus a growth of 7% growth by all India ports.

7) Adani Ports concluded the acquisition of Sarguja Rail and consolidated it into the company.

8) The acquisition of Gangavaram Port is underway and is expected to be completed in the next few months.

Management Commentary

Adani Ports CEO Karan Adani said the company showed “tremendous resilience” all through the pandemic period.

“Our learnings in 2020 helped us weather the storm and our operational expertise allowed us to continue our expansion,” he said.

The addition of two ports in 2021 – Krishnapatnam and Gangavaram in Andhra Pradesh on the east coast of India – to the ones on the west coast continued to expand the company’s pan-India presence.

“Our under-construction port of Vizhinjam in Kerala, along with our new terminal in Colombo, Sri Lanka, will act as a new trans-shipment hub in southeast Asia,” he said.