TIDMMPL
RNS Number : 2544B
Mercantile Ports & Logistics Ltd
30 September 2022
30 September 2022
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 modern port and logistics facility in
Navi Mumbai, Maharashtra, India, announces its interim results for
the period ended 30 June 2022.
Summary of key points during and post period :
-- Group revenue of GBP1.91 million (June 2021: GBP0.85 million) .
-- Loss for 30 June 2022 GBP 6.52 million (June 2021: GBP3.40 million)
-- Management remains comfortable with market expectations
-- Net asset value as at 30 June 2022 GBP 97.86 million (June 2021: GBP91.25 million)
-- Total assets of GBP154 million (June 2021: GBP148 million), a
debt to equity ratio of 0.47 (June 2021: 0.47) and cash of GBP2.01
million at 30 June 2022 (June 2021: GBP 1.68 million).
Jeremy Warner Allen, Executive Chairman of MPL said , "2022 has
seen the first full nine months of uninterrupted operations at
MPL's Karanja facility and our business model has started to prove
itself. So far this year we have handled 800,000 tons of cargo
(2021 c.227,000 tonnage) through contracted agreements and spot
market demand which includes multiple commodities including coal,
steel, cement, olivine flux and project cargo. We are also busy
with negotiations with other prospective customers which are
expected to boost the top line of the Group."
Jay Mehta, CEO of MPL stated, "These financial results show an
all-round performance aligned to a clearer business strategy. The
Group is expecting further strong operational and financial
performance in H2 2022, which is extremely pleasing and does, I
believe, show that our strategy is working."
Enquiries:
Mercantile Ports & Logistics Jay Mehta
Limited
C/O SEC Newgate
+44 (0)203 757 6880
Cenkos Securities plc Stephen Keys
(Nomad and Broker) +44 (0)207 397 8900
SEC Newgate Isabelle Smurfit/ Elisabeth Cowell
(Financial PR) +44 (0)203 757 6880
mpl@secnewgate.co.uk
Chairman's Statement
2022 has seen the first full nine months of uninterrupted
operations at MPL's Karanja facility and our business model has
started to prove itself. So far this year we have handled 800,000
tons of cargo (2021 c.227,000 tons) through contracted agreements
and spot market demand and the cargo has been diverse including
multiple commodities including coal, steel, cement, olivine flux
and project cargo.
Having secured customers that wish to utilize our facilities for
bulk cargoes and products, management's focus has been, and
continues to be on increasing margins by providing additional
volume and services to new and existing customers. We are pleased
to report that MPL has been successful in receiving the necessary
Government permissions to handle containers. This will allow our
facility at Karanja to receive containers directly from JNPT
enabling customers to avoid lengthy delays in transportation
bottlenecks. Services will include stuffing and de stuffing of
containers, groupage and other logistical operations. This is an
important development for the company, and is in accordance with
our plans to begin to service a market, which is significantly
bigger than bulk cargo. We would expect to derive our first
revenues from this initiative over the next 6-8 months.
Revenues for H1 2022 were GBP 1.91 mn, versus GBP 0.85 mn for H1
2021, which clearly demonstrate the operational momentum gained
over the past 12 month period. We expect such momentum and capacity
utilization to continue to grow through the rest of this year and
beyond. MPL continues to work with the State Government towards
enhancing its rail connectivity. Whilst a rail terminal is being
constructed c. 3.5km from our port, management is in active
discussions with the authorities for support to extend a spur to
our complex, which would provide a very valuable service to our
customers. The Federal Government has initiated a new logistics
policy and has announced the development of 8 Multimodal Logistics
Parks (MMLP's) across the State in partnership with the State
Government. MPL believes that its strategic location, at Karanja,
is well suited for developing a profitable MMLP and is actively
pursuing a partnership with the State.
As part of MPL's marketing initiatives, Jay Mehta, CEO, was a
speaker at a recent conference on Coastal shipping which was
attended by 500 delegates from the port, shipping and logistics
sectors. This has resulted in a number of new business
opportunities for our Karanja Facility. In addition, we have
strengthened our business development team, as we continue to see
business opportunities from contracted and spot customers as
Karanja increasingly becomes part of Mumbai's logistical
infrastructure. India and its economy is predicted to meet its
growth expectations this year and remains one of the few economies
that should achieve this. This provides a good backdrop within
which our Karanja facility can operate. Looking forward to the
final quarter of 2022, our Port and logistic utilization will
continue to increase, and therefore we remain comfortable in
meeting our revenue expectations for this financial year, with the
one proviso of commercial activity not being affected by
disruptions, which fall outside of management's control. Finally,
on behalf of the board, I should like to thank our staff,
management, and customers for their continuing hard work and
support.
At the time of the Placing and Subscription in August 2021, and
as set out in the circular at the time, the Subscription by Hunch
Ventures constituted a related party transaction under the AIM
Rules. It has been concluded that the process set out in the
Company's 2021 Annual Results and pursued to transfer the funds to
Guernsey constitutes a separate related party transaction. The
independent directors, having consulted with its Nominated Adviser,
consider that the terms of that transaction are fair and reasonable
insofar as its shareholders are concerned. The Company confirms
that the Subscription monies are now held in a bank account
controlled by a Group company.
Jeremy Warner Allan, Chairman
Mercantile Ports & Logistics Limited
29 September 2022
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIODED 30 JUNE 2022
Note
6 months 6 months Year ended
ended ended 31 Dec
30 June 30 June 2021
2022 2021
GBP000 GBP000 GBP000
CONTINUING OPERATIONS
Revenue 1,913 850 1,801
Operating costs (606) (84) (307)
Administrative expenses (4,521) (2,171) (8,373)
Operating loss before depreciation (228) (324) (3,747)
-----
2
Depreciation 2 (2,986) (1,081) (3,132)
-------------------------------------- ----- ------------------------ ------------------- --------------
OPERATING LOSS (3,214) (1,405) (6,879)
Finance income 22 29 40
Gains from extinguishment of
debt -- -- 5,408
( 4,576
Finance cost (3,323) (2,031) )
------------------------ ------------------- --------------
NET FINANCING COST (3,301) (2,002) 872
------------------------ ------------------- --------------
LOSS BEFORE TAX (6,515) (3,407) (6,007)
Tax expense for the period (25) - (14)
------------------------ ------------------- --------------
LOSS FOR THE PERIOD (6,540) (3,407) (6,021)
Loss for the period attributable
to:
Non-controlling interest (13) (7) (5)
Owners of the parent (6,527) (3,400) (6,016)
------------------------ ------------------- --------------
Loss for the period / year (6,540) (3,407) (6,021)
======================== =================== ==============
Other comprehensive income/(expense)
Items that will not be reclassified
to profit or loss
Re-measurement of net defined
benefit liability - - 8
Items that may be reclassified
to profit or loss
Exchange differences on translating
foreign operations 5 4,190 (3,018) (673)
------------------------ ------------------- --------------
Other comprehensive loss for
the period / year 4,190 (3,018) (665)
------------------------ ------------------- --------------
Total comprehensive loss for
the period / year (2,350) (6,425) (6,686)
======================== =================== ==============
Total comprehensive loss for
the period / year attributable
to:
Non-controlling interest (13) (7) (5)
Owners of the parent (2,337) (6,418) (6,681)
------------------------ ------------------- --------------
(2,350) (6,425) (6,686)
======================== =================== ==============
Loss per share (consolidated):
Basic & Diluted, for the period ( GBP 0.157p) ( GBP 0.002p) ( GBP 0.231p)
attributable to ordinary equity
holders
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2022
Note Period Period Year ended
ended ended 31 Dec
30 June 30 June 2021
2022 2021
GBP000 GBP000 GBP000
Assets
Property, plant and equipment 8 135,332 129,145 131,344
Intangible asset 20 4 4
--------- --------- -----------
Total non-current assets 135,352 129,149 131,348
--------- --------- -----------
Trade and other receivables 9 16,380 17,605 18,484
Cash and cash equivalents 2,010 1,679 4,783
--------- --------- -----------
Total current assets 18,390 19,284 23,267
Total assets 153,742 148,433 154,615
========= ========= ===========
Liabilities
Non-current
Employee benefit obligations 3 7 43
Borrowings 7 42,097 42,306 39,932
Lease liabilities payables 1,569 1,580 1,562
Non-current liabilities 43,669 43,893 41,537
--------- --------- -----------
Current
Employee benefit obligations 440 330 449
Borrowings 7 1,865 447 1,037
Current tax liabilities 404 403 415
Leases Liabilities payable 798 767 795
Trade and other payables 8,705 11,345 10,171
--------- --------- -----------
Current liabilities 12,212 13,292 12,867
--------- --------- -----------
Total liabilities 55,881 57,185 54,404
--------- --------- -----------
Net assets 97,861 91,248 100,211
========= ========= ===========
Equity
Share capital and share
premium 143,851 134,627 143,851
Retained earnings (22,929) (13,794) (16,402)
Translation reserve (23,047) (29,582) (27,237)
--------- --------- -----------
Equity attributable to
owners of parent 97,875 91,251 100,212
--------- --------- -----------
Non-controlling interest (14) (3) (1)
--------- --------- -----------
Total equity and liabilities 97,861 91,248 100,211
================ ========= =============
CONDENSED STATEMENT OF CASH FLOWS
FOR THE PERIODED 30 JUNE 2022
Note 6 months 6 months Year ended
ended ended 31 Dec
30 June 2022 30 June 2021
2021
GBP000 GBP000 GBP000
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before tax for the period / year (6,515) (3,407) (6,007)
Non cash flow adjustments 6 6,284 3,020 5,149
-------------- --------- -----------
Net cash generated/used from operating
activities (231) (387) (858)
-------------- --------- -----------
Net changes in working capital 6 810 (489) (4,669)
-------------- --------- -----------
Net cash from operating activities 579 (876) (5,527)
-------------- --------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (1,143) (1,082) (2,107)
Finance income 18 11 27
-------------- --------- -----------
Net cash used in investing activities (1,125) (1,071) (2,080)
-------------- --------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
From issue of additional shares - - 9,224
Proceeds from borrowing (net) - 992 984
Repayment of bank borrowing principal (63) (640) (641)
Interest paid on borrowing (2,009) (522) (810)
Repayment of leasing liabilities principal
(net) (179) (53) (96)
Interest payment on leasing liabilities (9) (24) (131)
-------------- --------- -----------
Net cash (used in) / generated from
financing activities (2,260) (247) 8,530
-------------- --------- -----------
Net change in cash and cash equivalents (2,806) (2,194) 923
Cash and cash equivalents, beginning
of the period 4,783 3,895 3,895
Exchange differences on cash and cash
equivalents 33 (22) (35)
-------------- --------- -----------
Cash and cash equivalents, end of
the period 2,010 1,679 4,783
============== ========= ===========
Note :
1) The adjustments and working capital movements have been
combined in the above Statement of Cash Flows.
Consolid ated St atement of Changes in Equity
for the PERIOD ended 30 JUNE 2022
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
2021 134,627 (26,564) (10,394) -- 4 97,673
Issue of share capital 10,102 -- -- -- -- 10,102
Share Issue cost (878) -- -- -- -- (878)
Transactions with owners 143,851 (26,564) (10,394) -- 4 106,897
--------- ------------ ---------- ------------ ----------------- --------
Loss for the period/year -- -- (6,016) -- (5) (6,021)
Foreign currency translation
differences for foreign
operations -- (673) -- -- -- (673)
Re-measurement of net
defined benefit pension
liability -- -- -- 8 -- 8
Re-measurement of net
defined benefit pension
liability transfer to
retained earning -- -- 8 (8) -- --
Total comprehensive income
for the year -- (673) (6,008) -- (5) (6,686)
--------- ------------ ---------- ------------ ----------------- --------
Balance at 31 December
2021 143,851 (27,237) (16,402) -- (1) 100,211
========= ============ ========== ============ ================= ========
Balance at 1 January
2022 143,851 (27,237) (16,402) -- (1) 100,211
Issue of share capital -- -- -- -- -- --
--------- ------------ ---------- ------------ ----------------- --------
Transactions with owners 143,851 (27,237) (16,402) -- (1) 100,211
--------- ------------ ---------- ------------ ----------------- --------
Loss for the period -- -- (6,527) -- (13) (6,540)
Foreign currency translation
differences for foreign
operations -- 4,190 -- -- -- 4,190
--------- ------------ ---------- ------------ ----------------- --------
Total comprehensive income
for the period -- 4,190 (6,527) -- (13) (2,350)
--------- ------------ ---------- ------------ ----------------- --------
Balance at 30 June 2022 143,851 (23,047) (22,929) -- (14) 97,861
========= ============ ========== ============ ================= ========
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 2022
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
facilities.
2. General information and basis of preparation
The condensed interim consolidated financial statements are for
6 months' period ended 30 June 2022 and are not for full year
accounts. The condensed interim consolidated financial statements
are prepared under AIM 18 guidelines. They have been prepared on
the 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 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 is confident of its ability to
raise further funds to meet cost overruns, project enhancements or
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 27(th)
September, 2022.
Operating Loss 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 2021.
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, 2022
There are no accounting pronouncements, which have become
effective from 1 January 2022 that 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 and believe that, for the foreseeable
future, the Group will have adequate resources to meet its
liabilities as they fall due.
In making this assessment, the Directors have considered the
current and projected cash balance, borrowing facilities available,
and 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 12 months post the signing of these financial
statements.
The group had a cash balance of GBP2.01 million as at 30 June
2022, 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 use the
cash generated from operations to manage the projected costs until
September 2023 of GBP 3.33 million.
Based on the above, after considering the past impact of
COVID-19 on the Group's future trading, the Directors believe that
it remains appropriate to continue to adopt the going concern in
preparing the financial statements.
5 . Comprehensive income
The comprehensive loss for the period is calculated after
crediting a gain of GBP 4.19 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 2022 of 95.96, 31 December 2021:
100.30 and 30 June 20 21 : 102.95 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
2022 2021 2021
GBP000 GBP000 GBP000
Adjustments and changes in
working capital
Depreciation 2,986 1,081 3,132
Finance income (18) (12) (40)
Unrealized exchange (loss)/gain 3 (8) --
Finance cost 3,309 1,956 4,459
Re-measurement of net defined
benefit liability - - (8)
Advance written off - - 3,000
Gain from extinguishment of
debt - - (5,408)
Provision for Gratuity 4 3 14
Loss on sale of Car - - --
6,284 3,020 5,149
------- ------- -----------
Change in trade and other payables 829 (23) (668)
Change in trade and other receivables (19) (466) (4,001)
810 (489) (4,669)
------- ------- -----------
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.
There has been a One Time Restructuring (OTR) Proposal,
initiated by the Group seeking relief under the Covid-19 Pandemic
stress on the financial position of the company. The lenders
sanctioned the proposal on 10 June 2021. Outstanding balance as at
30 June 2022 are as follows:
Particular Amount Amount
in in
INR Crore GBP Million
-----------
a) Term loan outstanding 365.24 38.06
----------- -------------
b) Funded Interest Term Loan (FITL)* 47.22 4.92
----------- -------------
c) Guaranteed Emergency Credit Line (GECL)# 9.38 0.98
----------- -------------
Total borrowing (a+b+c) 421.84 43.96
----------- -------------
Current 17.90 1.87
Non-current 403.94 42.10
----------- -------------
Balance as at 30 June, 2022 421.84 43.96
----------- -------------
* The interest on principal term loan for the period from
January 2021 to February 2022 (14 months) has been converted to
Funded Interest Term Loan (FITL).
# In calendar year ended Dec 2021, company has availed a GECL
loan from a public sector bank, which carries interest @7.95%
p.a.
The OTR sanctioned by the term lenders extends principal
repayment by 2 years (repayment to commence from quarter of
December 2022). The rate of interest on Term loan was reduced from
13.45% to 9.55% and FITL carries interest @ 10.55%.
Repayment of schedule of above outstanding loan based on OTR
sanction are as follow:
Repayment amount
Payment falling GBP in Million
due INR in Crore
Within 1 year 20.01 2.09
1 to 5 year's 235.02 24.49
After 5 year's 209.45 21.83
Total *464.48 *48.41
============= ===============
* Loan repayment is stated at gross amount, excluding gain on
debt modification GBP4.52 million (INR.42.64 crore).
The rate of interest will be 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 2022, the carrying amount of facility yet to be
capitalized was GBP 25.93 million (30 June 2021: GBP 81.14 million)
and part of port facility was capitalised on 01 October 2021 was
GBP 60.14 million. The amount of borrowing costs capitalised during
the six months ended 30 June 2022 was GBP Nil million (31 December
2021: GBP0.85 million).
The group intends to optimize its operations on land parcel of
70 acres proportionate cost for same has been capitalized till
date. The balance additional reclaimed land of c. 30 acres is ready
for being made available for use by future customers subject to
customized modifications including ground strength requirement,
surfacing etc.
The Group currently has excess surcharge material to the tune of
approx. c.10 to 15 acres in possession, in case need arises for
further reclamation the same will first be utilized to serve
additional demand for space by customers.
During the 6 months ended additions to property plant and
equipment are GBP1.13 million and remaining impact of GBP6.02
million was on account of exchange fluctuation as GBP became weaker
against INR (INR/GBP exchange rate at 30 June 2022 of 95.96, 31
December 2021: 100.30)
Depreciation on the property plant and equipment is included in
the administrative expenses.
9. Trade and other receivables
Trade and other receivable consists of following:
As at As at As at
Particular 30-Jun-22 30-Jun-21 31-Dec-21
GBP000 GBP000 GBP000
----------------- ---------- ----------
Trade receivable 404 246 150
Deposits 2,166 2,435 2,493
Other receivables* 13,810 14,924 15,841
16,380 17,605 18,484
================= ========== ==========
* Other receivables include advances to suppliers, accrued
interest receivable and prepayments.
10. Event Subsequent to the reporting period.
There are no subsequent events post 30 June 2022 requiring
disclosure in these interim results.
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