Operations APSEZ

Published on May 24th, 2017

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Karan Adani Sets a Blistering Pace in First Full Year as CEO at APSEZ

In his first full year as chief executive officer, Karan Adani has delivered a stellar all-round result for Adani Ports and Special Economic Zone Ltd (APSEZ) for the financial year 2017, surpassing the 12 union government ports on all performance parameters except in total revenue.

Mumbai-listed APSEZ, India’s biggest private port operating firm, which runs eight port facilities on the country’s western and eastern coasts, saw its revenue jump 19 per cent while its net profit zoomed 35 per cent. Cargo volume grew 11 per cent including a scintillating 27 per cent rise in container loading.

APSEZ’s ports and terminals are located at Mundra, Dahej, Hazira, Kandla, Mormugao, Dhamra, Vizag and Kattupalli with new facilities under construction at Kamarajar and Vizhinjam. Mundra is India’s biggest commercial port by volumes.

While the 12 so-called major ports or those owned by the union government earned a combined Rs 11,894.56 crores from handling 647.63 million tonnes (MT) of cargo in the year ended 31 March 2017, APSEZ earned Rs 8,439 crores from handling 169 MT of cargo or about one-fourth of the cargo handled by the 12 major ports.

Yet, APSEZ notched a higher net profit of Rs 3,920 crore compared to the net surplus of Rs 2,819.74 crore posted by the dozen union government ports.

Container cargo volumes at the 12 ports reached 8.446 million twenty foot equivalent units or TEUs in the year to March 2017 with Jawaharlal Nehru Port Trust (JNPT) near Mumbai alone loading 4.5 million TEUs or more than half of the total volumes.

In contrast, APSEZ handled 4.24 million TEUs during 2016-17 and is expected to overtake JNPT to become India’s biggest container port during the fiscal year that began in April.

While JNPT, which started operations in 1989, took 27 years to touch 4.5 million TEUs, APSEZ has almost caught up with JNPT in 16 years.

In terms of over-all cargo growth including in containers, APSEZ fared much better. APSEZ clocked a volume growth of 11 per cent to 169 MT from 152 MT a year earlier while the 12 ports grew by 6.79 per cent to 647.63 MT from 606.47 MT a year ago.

In containers, which is one of the focus areas for the firm, APSEZ set a scorching growth rate of 27 per cent while the 12 ports reported a paltry growth rate of 3.04 per cent.

For Karan Adani, son of billionaire Gautam Adani, the promoter of APSEZ, who took the reins of APSEZ as CEO on 1 January 2016, the strategy is paying off.

“This is one of our best all round performance,” Karan, son of billionaire Gautam Adani, the promoter of APSEZ, said in a statement. “Our strategy to diversify our cargo mix and focus on high value cargo continues to yield positive results. FY17 volume growth was led by containers and high growth in other ports namely Hazira, Dhamra and Kattupalli. Our EBITDA margins have been improving year on year and this is likely to continue given our focus on operational efficiencies, technology and cost control,” he added.

APSEZ declared a dividend of 65 per cent, the highest after going public in 2007.

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