REG - Mercantile Ports&Log - Trading Update

Mercantile Ports & LogisticsAnnouncement

10/01/2024 07:00

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RNS Number : 1649Z  Mercantile Ports & Logistics Ltd  10 January 2024

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the UK version of the EU
Market Abuse Regulation (2014/596) which is part of UK law by virtue of the
European Union (Withdrawal) Act 2018, as amended and supplemented from time to
time.

 

10 January 2024

 

 

Mercantile Ports & Logistics Limited

 

("MPL" or the "Company" and, together with its subsidiaries, the "Group")

 

Trading Update

 

For the vast majority of the year, the Company traded well and in line with
expectations and further progress was made at Karanja. However, the recent
acquisition of a port in the region had a short term impact on the trading
volumes at Karanja in the month of December. As a result of this transaction,
importers sought to clear stockpiles of existing supplies of coal at that port
and that has meant that a number of coal importing customers of Karanja
elected to take advantage of this short term dynamic and acquired coal from
that port, rather than import coal through the Company's Karanja facility, as
forecast. As a result, the Company expects Revenue for the year ending 31
December 2023 to be approximately £5.4m.

It is important to note that overall demand for coal in the region has not
decreased and, therefore, the stockpiles of coal that were at the acquired
port will need to be replenished and stored elsewhere. As such, the Company is
confident that the volumes of coal that it had expected in December will be
deferred to early 2024 and the Company confirms that market conditions and
coal volumes have now normalised. In addition, the Company has visibility of a
robust pipeline and expects to announce contracts for handling of new
commodities in the coming weeks. The Company was pleased to complete its
contract with Tata Daewoo in June of 2023 and is proud to have played an
important part in the construction of the Trans Harbour Link, the country's
longest bridge, which is due to be inaugurated next week by the Prime Minister
of India. The high load bearing concretised ground at Karanja that has been
vacated by Tata Daewoo is ideally suited to handle the Company's container
business.

The Company is continuing to work with the lending consortium of state-owned
banks in restructuring its debt facility. While this process has taken longer
than originally envisaged, the Company continues to have an excellent
relationship with its banks and remains confident of a facility with much more
attractive terms being put in place.

Jeremy Warner Allen, Chairman of MPL stated that "We close our second full
year of operations at the facility and while we are surprised by the short
term impact on trading in December, we are confident that this is a deferral
that will flow through as revenue for the Company in 2024. The Company enters
2024 with real momentum and the Board expects significant progress at its
facility in the coming months."

- Ends -

 

For further information, please visit www.mercpl.com or contact:

 

 MPL                                c/o SEC Newgate

                                    +44 (0) 20 3757 6880
 Cavendish Capital Markets Limited  Stephen Keys

 (Nomad and Broker)                 +44 (0) 207 220 0500
 SEC Newgate                        Elisabeth Cowell/ Bob Huxford

 (Financial Communications)         +44 (0) 20 3757 6880

                                    mpl@newgatecomms.com

 

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