The second largest private sector port operator, JSW Ports, which has completed its capacity expansion with an investment of Rs 4,000 crore, plans to be a net debt free business over the next two to three years, having already reduced Rs 862 crore so far. this exercise.
The company funded higher cost rupee loan repayments from a syndicate of lenders, whose rate was 9.5%, partly with internal accruals and the remainder through the issuance of overseas bonds of $400 million in February this year, Lalit Singhvi, the CFO and director of JSW Infrastructure, the wholly owned subsidiary of JSW Group headed by Sajjan Jindal and the holding company, told PTI on Friday. port activities.
After repaying Rs 862 crore of debt, he said, the company will have in its book a net debt of Rs 2,700 crore and a gross debt of Rs 4,200 crore. With this, JSW Ports has already refunded over Rs 2,800 crore in the past few years.
The rupee debt came from a consortium of banks including Axis Bank, Canara Bank, South Indian Bank, Union Bank of India and Bank of India, Singhvi said, adding that following the debt reduction, the National rating agency Care has raised JSW Ports’ rating to ‘AA’. ‘ with a stable outlook.
“We hope to be a net debt free business in the next two to three years as we are done with investments and capacity additions. We also have a stable cash flow of Rs 1,000 crore, thanks to the margin nature high of our business which is more than 50 percent.
“The plan is supported by the steady revenue growth, which we expect to cross 45% this financial year to Rs 3,100 crore from which we expect a cash profit of Rs 1,500-1,600 crore. reduce all of our debt and become a net-debt-free company within the next two to three years, he said.
JSW Ports operates port assets in Jaigarh and Dharamtar in Maharashtra with an installed capacity of 153 million tons per year. Apart from that, it operates a 24 million ton terminal in Fujairah in the United Arab Emirates under a management contract which mainly deals with limestone.
“We may also opt for an equity fundraising in some time, as we are also considering aggressive growth through acquisitions and are also very keen to participate in the government’s divestment process. The equity fundraising is expected to be easy given the company’s strong balance sheet, well the $22 billion parent, Singhvi added.
In the last financial year, the company completed a Rs 4,000 crore investment plan, which started four years ago, through which its capacity increased from 81 tonnes in FY19 to 153 tonnes in FY22, Singhvi said, adding that the company now has adequate capacity and utilization. the level is only 65 percent now.
As for the addition of bulk cargo handling capacity, he said, it increased by 34% in FY21 and then by 45 tons in FY22, reaching growth of 36%, he said, and expects volume to exceed 45% in this fiscal year of 62 tons. .
Singhvi said the company is likely to end the current financial year with revenue of Rs 3,100 crore and earn cash profit of Rs 1,500 to 1,600 crore. In FY21, the same value stood at Rs 1,678 crore and Rs 891 crore respectively, which increased to Rs 2,379 crore and Rs 1,215 crore in FY 22.
The Company’s facilities mainly handle bulk cargoes such as iron ore, thermal coal, coking coal, fertilizers, bauxite and sugar. On the liquid side, it deals with molasses, edible oil, LPG and LNG, he said.
Currently, 70% of the volume is captive/internal and the rest comes from third parties, he said and pointed out that for fiscal year 2019, the captive capacity was 95%.
“Our goal is to grow third-party freight to 40% over the next two to three years and reduce captive use to 60%,” he said.
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