REG - Mercantile Ports&Log - Interim Results
29/09/2023 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230929:nRSc0538Oa&default-theme=true
RNS Number : 0538O Mercantile Ports & Logistics Ltd 29 September 2023
29 September 2023
Mercantile Ports & Logistics Limited
("MPL", the "Group" or the "Company")
Interim Results
Mercantile Ports & Logistics (AIM: MPL), which is operating and continuing
to develop a port and logistics facility in Navi Mumbai, Maharashtra, India,
announces its interim results for the period ended 30 June 2023.
Operational review - Jay Mehta, CEO:
We are pleased to see MPL operations building momentum on a year on year
basis. The facility is gaining further traction with its existing customers,
while being in advanced negotiations with new customers for new commodities
including containers, liquid and oil and gas cargoes. The following table for
illustrates this for cargoes handled during corresponding periods-
Period January to June January to August
2023 2022 2023 2022
Cargo handled 783,457 494,168 862,962 685,409
(in tonnage)
These cargo movements are handled through contracted agreements and spot
market demand which include multiple commodities such as coal, steel, cement
and project cargo.
Financial review:
· Group revenue of £2.69 million (June 2022: £1.91 million).
· Positive EBITDA of £0.22 million for H1 June 2023 as against EBITDA
loss of £0.23 million for H1 June 2022.
· Loss for 30 June 2023 £5.38 million (June 2022: £6.54 million).
· Net asset value as at 30 June 2023 £90.99 million (June 2022: £97.86
million)
· Total assets of £144.47 million (June 2022: £153.74 million), a debt
to equity ratio of 0.47 (June 2022: 0.47) and cash of £6.40 million at 30
June 2023 (June 2022: £2.01 million).
The board believes that these results show an improvement in all-round
performance aligned to a clearer business strategy. The Group is expecting
further strong operational and financial performance in H2 2023, which we
believe will help us achieve our targets for the current financial year.
Enquiries:
Mercantile Ports & Logistics Limited Jay Mehta
C/O SEC Newgate
+44 (0)203 757 6880
Cavendish Securities plc Stephen Keys
(Nomad and Broker) +44 (0)207 220 0500
SEC Newgate UK Elisabeth Cowell/ Bob Huxford
(Financial PR) +44 (0)203 757 6880
mpl@ (mailto:mpl@newgatecomms.com) secnewgate.co.uk
Chairman's Statement
The Indian economy has shown robust growth during the current year with GDP
growth rate of 7.8% year-on-year in the April - June 2023 quarter and 6.1%
year-on-year in the January - March 2023 quarter. India's influence in world
affairs continues to develop positively as evidenced by the successful G20
Summit held in Delhi recently.
Against this backdrop, our Port of Karanja, located in Mumbai is uniquely
positioned in the most important State in the country which acts as a gateway
to multiple land locked States.
We started the year strongly and continued to build volumes through the
facility. At the same time, we have been pleased with the increased number of
enquiries from potential customers that are interested in using our facility.
While the existing customers are pleased with the service levels and the
overall ease of doing business at our port, the pipeline of new customers
looking to use our facility is robust and will further expand our business.
Potential customers with whom we are in discussions include some of the major
private sector industrial users but we are also in advanced discussions with
state and federal government entities to use the Karanja facility. In
addition to a variety of bulk commodities, MPL is looking increase the
handling of liquids, containers and oil & gas cargoes at the port. Our
discussions with the State Government regarding development of a logistics
park at the facility continue to progress productively and we look forward to
updating our shareholders on developments there.
We continue to work closely with our lenders for re-phasement of the loan
facility from a seven-year repayment period to fourteen years including a
two-year moratorium on principal repayments. We expect the renegotiated
facility to become effective within the next four to six-week period.
We were delighted to receive the support of shareholders when we raised
additional capital over the summer. On behalf of the Board, I should like to
welcome new shareholders and to thank our existing shareholders for their
ongoing support. In particular, I should like to thank Hunch Ventures for
their continued commitment, as they increased their shareholding at the time
of the fundraising.
Notwithstanding the intense monsoon of this year, our Port is busy and, we
remain confident of a successful outcome in 2023.
Jeremy Warner Allan, Chairman
Mercantile Ports & Logistics Limited
29 September 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 JUNE 2023
Note
6 months ended 6 months ended Year ended
30 June 2023 30 June 2022 (restated) * 31 Dec 2022
£000 £000 £000
CONTINUING OPERATIONS
Revenue 2,685 1,913 4,872
Operating costs (1,234) (410) (1,449)
Administrative expenses (4,037) (4,717) (9,978)
Operating profit / (loss) before depreciation 2 217 (228) (324)
Depreciation 2 (2,803) (2,986) (6,231)
OPERATING LOSS (2,586) (3,214) (6,555)
Finance income 15 22 38
Finance cost (2,809) (3,323) (5,543)
NET FINANCING COST (2,794) (3,301) (5,505)
LOSS BEFORE TAX (5,380) (6,515) (12,060)
Tax expense for the period - (25) 2,421
LOSS FOR THE PERIOD (5,380) (6,540) (9,639)
Loss for the period attributable to:
Non-controlling interest (10) (13) (18)
Owners of the parent (5,370) (6,527) (9,621)
Loss for the period / year (5,380) (6,540) (9,639)
Other comprehensive income/(expense)
Items that will not be reclassified to profit or loss
Re-measurement of net defined benefit liability - - 1
Items that may be reclassified to profit or loss
Exchange differences on translating foreign operations 5 (3,108) 4,190 808
Other comprehensive loss for the period / year (3,108) 4,190 809
Total comprehensive loss for the period / year (8,488) (2,350) (8,830)
Total comprehensive loss for the period / year attributable to:
Non-controlling interest (10) (13) (18)
Owners of the parent (8,478) (2,337) (8,812)
(8,488) (2,350) (8,830)
Loss per share (consolidated):
Basic & Diluted, for the period attributable to ordinary equity holders (£0.122p) (£0.157p) (£0.232p)
* The Consolidated Statement of Comprehensive Income for the 6 months ended 30
June 2022 has been restated as certain operating costs aggregating to GBP 196
('000) have been presented as administrative expenses. The restatement is
carried out to align the presentation of these costs in line with the annual
audited financial statements and current half year.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023
Note Period ended Period ended Year ended
30 June 2023 30 June 2022 31 Dec 2022
£000 £000 £000
Assets
Property, plant and equipment 8 120,256 135,332 127,382
Intangible asset 14 20 14
Non-current tax assets 2,077 - 2,108
Total non-current assets 122,347 135,352 129,504
Inventory of traded goods - - 96
Trade and other receivables 9 15,726 16,380 14,110
Cash and cash equivalents 6,398 2,010 558
Total current assets 22,124 18,390 14,764
Total assets 144,471 153,742 144,268
Liabilities
Non-current
Employee benefit obligations 56 3 53
Borrowings 7 36,047 42,097 39,165
Lease liabilities payables 763 1,569 1,611
Non-current liabilities 36,866 43,669 40,829
Current
Employee benefit obligations 481 440 529
Borrowings 7 4,113 1,865 2,307
Current tax liabilities 73 404 17
Leases Liabilities payable 1,490 798 817
Trade and other payables 10,457 8,705 8,388
Current liabilities 16,614 12,212 12,058
Total liabilities 53,480 55,881 52,887
Net assets 90,991 97,861 91,381
Equity
Share capital and share premium 151,949 143,851 143,851
Retained earnings (31,392) (22,929) (26,022)
Translation reserve (29,537) (23,047) (26,429)
Equity attributable to owners of parent 91,020 97,875 91,400
Non-controlling interest (29) (14) (19)
Total equity and liabilities 90,991 97,861 91,381
CONDENSED STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 30 JUNE 2023
Note 6 months ended 6 months ended Year ended
30 June 2023 30 June 2022 31 Dec 2022
£000 £000 £000
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before tax for the period / year (5,380) (6,515) (12,060)
Non cash flow adjustments ((1)) 6 5,600 6,284 11,748
220 (231) (312)
Net cash generated/(used in) operating activities
Net changes in working capital 6 651 810 305
Taxes paid (46) -- (85)
Net cash from operating activities 825 579 (92)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (283) (1,143) (1,425)
Finance income 15 18 38
Net cash generated/(used in) investing activities (268) (1,125) (1,387)
CASH FLOWS FROM FINANCING ACTIVITIES
From issue of additional shares 4,368 -- --
Subscription money received ((2)) 1,951 -- 2,452
Repayment of bank borrowing principal (117) (63) (881)
Interest paid on borrowing (759) (2,009) (4,217)
Repayment of leasing liabilities principal (net) (160) (179) (138)
Interest payment on leasing liabilities -- (9) --
Net cash generated / (used in) from financing activities 5,283 (2,260) (2,784)
Net change in cash and cash equivalents 5,840 (2,806) (4,262)
Cash and cash equivalents, beginning of the period 558 4,783 4,783
Exchange differences on cash and cash equivalents -- 33 37
Cash and cash equivalents, end of the period 6,398 2,010 558
((1)) The adjustments and working capital movements have been combined in the
above Statement of Cash Flows.
((2)) As in previous fundraises, a process is required to be followed to
enable the Company to receive Hunch's subscription monies in the Company's
Indian bank account. This will conclude shortly but, in the meantime, the
Company has a corporate guarantee in place and has on-demand access to the
Hunch subscription monies at all times.
Consolidated Statement of Changes in Equity
for the PERIOD ended 30 JUNE 2023
Stated Translation Retained Other Non- controlling Interest Total
Capital Reserve Earnings Components of equity Equity
£000 £000 £000 £000 £000 £000
Balance at 1 January 2022 143,851 (27,237) (16,402) -- (1) 100,211
-- -- -- -- -- --
Transaction with owners in their capacity as owners
Loss for the period -- -- (9,621) -- (18) (9,639)
Foreign currency translation differences for foreign operations -- 808 -- -- -- 808
-- -- -- 1 -- 1
Re-measurement of net defined benefit pension liability
Re-measurement of net defined benefit pension liability transfer to retained -- -- 1 (1) -- --
earning
Total comprehensive income for the year -- 808 9,620 -- (19) (8,830)
Balance at 31 December 2022 143,851 (26,429) (26,022) -- (19) 91,381
Balance at 1 January 2023 143,851 (26,429) (26,002) -- (19) 91,381
Issue of share capital 9,044 -- -- -- -- 9,044
Share issue costs (946) -- -- -- -- (946)
Transaction with owners in their capacity as owners 8,098 -- -- -- -- 8,098
Loss for the period -- -- (5,370) -- (10) (5,380)
Foreign currency translation differences for foreign operations -- (3,108) -- -- -- (3,108)
Total comprehensive income for the period -- (3,108) (5,370) -- (10) (8,488)
Balance at 30 June 2023 151,949 (29,537) (31,392) -- (29) 90,991
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
1. Reporting entity
Mercantile Ports & Logistics Limited (the "Company") was incorporated in
Guernsey under the Companies (Guernsey) Law 2008 on 24 August 2010. The
condensed interim consolidated financial statements of the Company for the
period ended 30 June 2023 comprises the financial statement of the Company and
its subsidiaries (together referred to as the "Group"). The Company has been
established to develop, own and operate port and logistics facility.
2. General information and basis of preparation
The condensed interim consolidated financial statements are for 6 months'
period ended 30 June 2023 and are not the full year accounts. The condensed
interim consolidated financial statements are prepared in accordance with IAS
34 Interim Financial Reporting as adopted by the European Union (EU) and under
AIM 18 guidelines. They have been prepared on a historical cost basis. They do
not include all of the information required in annual financial statements in
accordance with International Financial Reporting Standards ("IFRS") as issued
by the EU. The condensed interim consolidated financial statements are neither
audited in accordance with International Standards on Auditing (UK) nor
subject to review as per International Standard on Review Engagements (ISRE)
2410.
The condensed interim consolidated financial statements are presented in Great
British Pounds Sterling (£), which is the functional currency of the parent
company. The preparation of the condensed interim consolidated financial
statements requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported amounts of
assets, liabilities, income and expenses. Actual results may differ from these
estimates.
In preparing these, condensed interim consolidated financial statements, the
significant judgements made by management applying the Group's accounting
policies and the key sources of estimation uncertainty are the same as those
applied in the annual IFRS financial statements. "The Company has successfully
raised funds of £9.044 million which will be utilized towards servicing of
debt and working capital requirements. The Company's financing effort to date
is considered sufficient to enable the Company to fund all aspects of its
operations. As a result, the condensed interim consolidated financial
statements have been prepared on a going concern basis."
The condensed interim consolidated financial statements have been approved for
issue by the Board of Directors on 29 September, 2023.
Operating profit before depreciation
The above information is presented separately in the statement of
comprehensive income as a supplementary information. This information is a
primary measure used by the executive management and the Board to assess the
financial performance of the Group, as it provides a more comparable
assessment of the Group's year on year performance. It may also be a key
metric used by the investor community to assess the performance of our
year-on-year operations.
3. Significant accounting policies
The interim financial statements have been prepared in accordance with the
accounting policies adopted in the Group's last annual financial statements
for the year ended 31 December 2022. The accounting policies have been applied
consistently throughout the Group for the purposes of preparation of these
interim financial statements.
New standards, amendments and interpretations to existing standards are
effective from January 1, 2023
There is an amendment to IAS 12 - deferred tax related to assets and
liabilities arising from a single transaction. This amendment does not have a
significant impact on the Group's interim condensed consolidated financial
statements.
4. Going Concern
The Directors have considered the application of the going concern basis of
accounting.
In making this assessment, the Directors have considered the current and
projected cash balance, borrowing facilities available, ongoing debt
renegotiations with consortium banks, anticipated future utilisation of
available funds, the Company's ability to control the variable costs, Group's
capital investment plans and the projected operating performance of the
business for the 15 months post the signing of these financial statements.
The group had a cash balance of £6.40 million as at 30 June 2023, and an
additional line of unsecured credit from Hunch Ventures amounting to £4.5
million to mitigate funding risk as well as ensuring continuity in business.
The company will continue to use the cash generated from operations as well
as the balance subscription money receivable from Hunch Ventures of £2.95
million, to manage the projected costs until December 2024.
The Indian subsidiary has been in discussion with its consortium of banks for
restructuring the existing debt facility. The Directors are confident that a
restructured debt facility will be afforded to the company, that will include
an increase in the term of the loan by an additional 7 years as well as
moratorium on principal repayments for a period of 2 years and a moratorium on
interest payable for 12 months.
Based on the above indicators, after taking into account the recent
fundraising and the renegotiation on the debt restructuring, the Directors
believe that it remains appropriate to continue to adopt the going concern in
preparing the forecasts.
However, the fact that the debt restructure has not been completed to date
represents the existence of a material uncertainty which may cast significant
doubt on the Group's ability to continue as a going concern. The financial
statements do not include the adjustments that would result if the Group was
unable to continue as a going concern.
5. Comprehensive income
The comprehensive loss for the period is calculated after debiting a loss of
£ 3.11 million, which arises on the retranslation of foreign operations to
Great British Pounds Sterling (£), which is the functional currency of the
Company. (INR/GBP exchange rate at 30 June 2023 of 103.51, 31 December 2022:
99.74 and 30 June 2022: 95.96 are used).
6. Cash flow adjustments and changes in working capital
The following non-cash flow adjustments and adjustments for changes in
working capital made to profit before tax to arrive at operating cash flow:
Period ended Period ended Year ended
30 Jun 2023 30 Jun 2022 31 Dec 2022
£000 £000 £000
Adjustments and changes in working capital
Depreciation 2,803 2,986 6,231
Finance income (15) (18) (38)
Unrealized exchange (loss)/gain -- 3 --
Finance cost 2,809 3,309 5,543
Re-measurement of net defined benefit liability -- -- (1)
Provision for Gratuity 3 4 13
5,600 6,284 11,748
Change in trade and other payables 705 829 247
Change in trade and other receivables (150) (19) 154
Change in inventory 96 -- (96)
651 810 305
7. Loan facility
Karanja Terminal & Logistics Private Limited (KTLPL), the Indian
subsidiary was sanctioned a term loan of INR 480 crores (£46.63 million) by 4
Indian public sector banks and the loan agreement was executed on 28th
February, 2014. The loan was further successfully renegotiated with its
lenders in June 2021 to reduce the interest rate from 13.45% to 9.50% p.a. and
extend the commencement of principal repayments out by 24 months.
Outstanding balance as at 30 June 2023 are as follows:
Particular Amount in Amount in
INR Crore
£ Million
Total borrowing 415.68 40.16
Current 42.57 4.11
Non-current 373.11 36.05
Balance as at 30 June, 2023 415.68 40.16
As part of its capital structure optimization, the Indian subsidiary has
initiated discussions with its lenders to restructure the term loan to allow
for re-phasement of the loan from seven years to fourteen-year period
including a two-year moratorium on principal repayments. We expect this
process to conclude over the coming weeks and the new package to become
effective in H2 2023.
Repayment of schedule of above outstanding loan based on OTR sanction are as
follow:
Repayment amount
INR in Crore GBP in Million
Within 1 year 42.57 4.11
1 to 5 year's 297.21 28.71
After 5 year's 120.25 11.62
Total *460.03 *44.44
* Loan repayment is stated at gross amount, excluding gain on debt
modification £4.28 million (INR 44.35 crore).
The rate of interest is a floating rate linked to the Canara bank base rate
(7.40%) with an additional spread of 215 basis points. The present composite
rate of interest is 9.55%. Above borrowings are secured by the hypothecation
of the port facility and pledge of its shares as well as a personal guarantee
by the Nikhil Gandhi. The carrying amount of the above bank borrowing
considered as a reasonable approximation of the fair value.
8. Property, plant and equipment
As at 30 June 2023, the carrying amount of facility yet to be capitalized was
£24.22 million (30 June 2022: £25.93 million).
During the 6 months ended 30 June 2023, additions to property plant and
equipment are £0.29 million and negative impact of £4.92 million was on
account of exchange fluctuation as GBP became stronger against INR (INR/GBP
exchange rate at 30 June 2023 of 103.51, 31 December 2022: 99.74)
Depreciation on the property plant and equipment is included in the
administrative expenses.
9. Trade and other receivables
Trade and other receivable consist of following:
As at As at As at
30-Jun-23 30-Jun-22 31-Dec-22
£000 £000 £000
Trade receivable 568 404 896
Deposits 1,230 2,166 1,442
Other receivable 13,928 13,810 11,772
(Advances to contractors, prepayment, accrued interest)
15,726 16,380 14,110
10. Event Subsequent to the reporting period.
Pursuant to Corporate announcement dated 28 July 2023, MPL issued 13,333,333
shares amounting to £400,000 via the subscription. Immediately following
Admission on 31 July 2023, the Company's enlarged issued share capital will
comprise 356,312,692 Ordinary Shares, of which none are held in treasury.
As in previous fundraises, a process is required to be followed to enable the
Company to receive Hunch's subscription monies in the Company's Indian bank
account. This will conclude shortly but, in the meantime, the Company has a
corporate guarantee in place and has on-demand access to the Hunch
subscription monies at all times.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR BUGDCIBDDGXIRecent news on Mercantile Ports & Logistics
See all newsREG - Mercantile Ports&Log - Director/PDMR Shareholding
AnnouncementREG - Mercantile Ports&Log - Director/PDMR Shareholding
AnnouncementREG - Mercantile Ports&Log - Trading Update
AnnouncementREG - Mercantile Ports&Log - Change of Nominated Adviser and Broker
AnnouncementREG - Mercantile Ports&Log - Directorate Change
Announcement