TIDMMPL
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
(in tonnage) 783,457 494,168 862,962 685,409
--------------- -------- -------- --------- ---------
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 GBP2.69 million (June 2022: GBP1.91 million) .
-- Positive EBITDA of GBP0.22 million for H1 June 2023 as
against EBITDA loss of GBP0.23 million for H1 June 2022.
-- Loss for 30 June 2023 GBP 5.38 million (June 2022: GBP6.54 million).
-- Net asset value as at 30 June 2023 GBP 90.99 million (June 2022: GBP97.86 million)
-- Total assets of GBP144.47 million (June 2022: GBP153.74
million), a debt to equity ratio of 0.47 (June 2022: 0.47) and cash
of GBP6.40 million at 30 June 2023 (June 2022: GBP2.01
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 Jay Mehta
Limited
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@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 PERIODED 30 JUNE 2023
Note
6 months 6 months Year ended
ended ended 31 Dec
30 June 30 June 2022
2023 2022 (restated)
*
GBP000 GBP000 GBP000
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
( 5,543
Finance cost (2,809) (3,323) )
-------------- ------------------ --------------
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 ( GBP 0.122p) ( GBP 0.157p) ( GBP 0.232p)
attributable to ordinary equity
holders
* 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 Period Year ended
ended ended 31 Dec
30 June 30 June 2022
2023 2022
GBP000 GBP000 GBP000
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 PERIODED 30 JUNE 2023
Note 6 months 6 months Year ended
ended ended 31 Dec 2022
30 June 30 June
2023 2022
GBP000 GBP000 GBP000
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
--------- --------- -------------
Net cash generated/(used in) operating
activities 220 (231) (312)
--------- --------- -------------
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.
Consolid ated St atement of Changes in Equity
for the PERIOD ended 30 JUNE 2023
Stated Translation Retained Other Non- controlling Total
Capital Reserve Earnings Components Interest Equity
of equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------- ------------ ---------- ------------ -----------------
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
Re-measurement of net
defined benefit pension
liability -- -- -- 1 -- 1
Re-measurement of net
defined benefit pension
liability transfer to
retained earning -- -- 1 (1) -- --
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 (GBP), 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
GBP9.044 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 GBP6.40 million as at 30 June
2023, and an additional line of unsecured credit from Hunch
Ventures amounting to GBP4.5 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 GBP2.95
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 GBP 3.11 million, which arises on the
retranslation of foreign operations to Great British Pounds
Sterling (GBP), 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 Period
ended ended Year ended
30 Jun 30 Jun 31 Dec
2023 2022 2022
GBP000 GBP000 GBP000
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
(GBP46.63 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
INR Crore in
GBP 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 GBP4.28 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 GBP24.22 million (30 June 2022: GBP25.93
million).
During the 6 months ended 30 June 2023, additions to property
plant and equipment are GBP0.29 million and negative impact of
GBP4.92 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
GBP000 GBP000 GBP000
---------- ---------- ----------
Trade receivable 568 404 896
Deposits 1,230 2,166 1,442
Other receivable
(Advances to contractors, prepayment,
accrued interest) 13,928 13,810 11,772
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 GBP400,000 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.
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