Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Gujarat Pipavav Port (GPPV)
Infrastructure
PAT positive thanks to strong volumes, margin expansion, low interest costs.
GPPL reported strong 4QCY10 revenue growth of 26% yoy led by strong container
volume growth (up 29%) and higher average realizations (up 18%). EBITDA margins
expanded to 44% (versus 29% in 4QCY09) led by operating leverage and absence of
PRCL provisions. Strong revenue growth, margin expansion and lower interest cost
(post debt repayment) led to GPPL’s first quarter of positive net profit (of Rs111 mn).
Turns PAT positive on the back of strong volumes, margin expansion and low interest costs
Revenue growth led by strong container volumes and higher realizations. GPPL reported
4QCY10 revenues of Rs875 mn, up 26% yoy. The growth was primarily led by strong container
volume growth (up 23% yoy) as well as increase in average realizations (up17-18% yoy).
Strong margin expansion on operating leverage and absence of PRCL provisions. EBITDA
margin recorded strong expansion to 44% in 4QCY10 versus 29% in 4QCY09 and 43.2% in
the previous quarter, primarily led by an absence of provisions for PRCL (meeting the minimum
guaranteed volume levels) and operating leverage due to strong volume growth.
Turns PAT positive. GPPL reported PAT of Rs111 mn in this quarter (first quarter of profits)—
aided by absence of PRCL provisioning and lower interest costs on debt repayment.
Strong container growth; higher realizations attributed to better tariffs and cargo mix
Container volumes continued to record a strong growth, up 29% yoy. However, bulk volumes
were down 23% yoy due to shift of Essar’s iron pellet cargo volumes to its own captive port. This
loss in volume was partially offset by higher fertilizer volumes. Average realization for the quarter
increased by about 18% yoy on the back of (1) volumes from recently added shipping lines with
better terms of agreements, and (2) favorable cargo mix—higher proportion of fertilizer cargo.
Full-year results broadly in line with estimates
For the full year ending December 31, 2010, GPPL reported revenues of Rs2.8 bn, up 29% yoy
(about 5% below our estimates). However, this was offset by better-than-expected EBITDA
margins of about 39.7% (our estimate of 37.8%). GPPL reported a net loss of Rs512 mn in
CY2010 versus our estimate of a loss of Rs552 mn.
Retain estimates and target price of Rs68/share; reiterate BUY
Reiterate BUY (TP: Rs68/share) on (1) likely strong near-term earnings, (2) attractive asset profile,
and (3) growing trade volumes amid capacity constraints.
Reports first quarter of positive net profit
GPPL reported 4QCY10 revenues of Rs875 mn, recording a strong 26% growth yoy from
Rs692 mn in 4QCY09. The growth was primarily driven by strong container volume growth,
up 29% yoy, and higher average realizations, up 18% yoy. Bulk volumes, however, declined
by about 23%. The company reported higher-than-expected EBIDTA margin of 43.9%
versus 28.9% in 4QCY09 (relatively flat on a sequential basis).
Strong EBITDA margin expansion and low interest costs (due to debt repayment of about
Rs300 mn) led to GPPLs first quarter of net profit of Rs111 mn.
Strong EBITDA margin expansion led by absence of PRCL provisions and operating
leverage—expansion higher than estimated
EBITDA margin recorded strong expansion to 44% in 4QCY10 versus 29% in 4QCY09 and
43.2% in the previous quarter. The strong expansion was primarily led by absence of
provisions to PRCL (meeting the minimum guaranteed volume levels) and operating leverage
due to strong volume growth. The margin expansion was higher than our expectations of
about 38% for the full year; implying 4Q margins of about 39%.
Higher realizations attributed to new container lines and cargo mix
The average realization per ton in 4QCY10 increased by about 18% yoy. The higher
realizations were attributed to (1) better terms on the agreements signed with the new
container shipping lines, and (2) favorable cargo mix—higher proportion of fertilizer cargo
which has higher realizations. CY2010 witnessed about 1-2 quarters of benefit from the
new shipping line; full-year impact would come in CY2011E.
Container volumes record strong growth; however, bulk volumes decline
Container volumes continued to record a strong growth, up 29% yoy to 142,000 TEUs in
4QCY10 versus 110,000 TEUs in 4QCY09. The strong growth was likely driven by addition
of several new container lines to its list of clients. For the full-year CY2010, GPPL container
volumes recorded a strong 45% growth to 466,000 TEUs, broadly in line with our estimates.
The decline in bulk volumes in 4QCY10 was led by lower iron pellet volumes which were
primarily from Essar. Essar has not built its own dedicated jetty. However, the management
has indicated that the port has almost completely made up for the loss in volumes. Note that
the company is operating at a high bulk capacity utilization of about 80%.
Port has outperformed the sector in terms of volume growth
In 4QCY10, Pipavav port recorded a total cargo growth of 7%. This is versus marginal
growth of just 0.7% for major ports in India. In the container segment, Pipavav port
recorded growth of 29% versus a yoy growth of 10.3% in the average container volumes
handled at major ports.
Full-year numbers broadly in line with estimates
For the full year ending December 31, 2010, GPPL reported revenues of Rs2.8 bn, up 29%
yoy (about 5% below our estimates). However, this was offset by better-than-expected
EBITDA margins of about 39.7% (our estimate of 37.8%). GPPL reported a net loss of Rs512
mn in CY2010 versus our estimate of a loss of Rs552 mn.
New liquid cargo agreement signed with Gulf Petrochemical
GPPL has recently signed a deal with Gulf Petrochemical allowing it to eventually build an oil
terminal at Pipavav port. This agreement is similar to the one signed with Aegis Logistics in
November 2010. Apart from revenues related to cargo handling at port, Gulf Petrochemicals
would also pay lease rentals to GPPL for the occupied land (for tankage farms).
GPPL management cited that the company is actively seeking/is in discussions with several
other firms to sign similar deals on the liquid cargo front. This will help increase the
utilization of the existing 65 mts berth available for liquid and LPG operations which is
currently under-utilized. Of the total 20 mn tons of liquid cargo capacity, Aegis and Gulf
Petrochemicals agreements will utilize about 1.2 mn tons.
The lease rentals from these agreements will start on an immediate basis. However, the full
impact of these agreements would kick in only once tank farms are set up; expected in the
last quarter of CY2011E or first quarter of CY2012E.
Retain estimates and target price; reiterate BUY
We retain our estimates and target price of Rs68/share comprised of (1) Rs60/share for the
core port business (FCFE valuation), (2) Rs2.6/share for its with Pipavav Rail Corporation Ltd
(PRCL, 1.5X book value), and (3) 50% of the calculated depreciated replacement value
receivable at the end of the concession period.
Our BUY rating on the company is based on (1) attractive asset profile, (2) strong likely nearterm
earnings growth led by volume growth, margin expansion and lower interest costs, (3)
the addition of several new shipping lines in the past few months shores up confidence in
achieving volume growth estimates, (4) long-term potential to add capacity at Pipavav port
led by availability of a large waterfront, and (5) ability to benefit from expected growth in
Indian trade volumes where capacities are constrained to keep pace with volume growth.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Gujarat Pipavav Port (GPPV)
Infrastructure
PAT positive thanks to strong volumes, margin expansion, low interest costs.
GPPL reported strong 4QCY10 revenue growth of 26% yoy led by strong container
volume growth (up 29%) and higher average realizations (up 18%). EBITDA margins
expanded to 44% (versus 29% in 4QCY09) led by operating leverage and absence of
PRCL provisions. Strong revenue growth, margin expansion and lower interest cost
(post debt repayment) led to GPPL’s first quarter of positive net profit (of Rs111 mn).
Turns PAT positive on the back of strong volumes, margin expansion and low interest costs
Revenue growth led by strong container volumes and higher realizations. GPPL reported
4QCY10 revenues of Rs875 mn, up 26% yoy. The growth was primarily led by strong container
volume growth (up 23% yoy) as well as increase in average realizations (up17-18% yoy).
Strong margin expansion on operating leverage and absence of PRCL provisions. EBITDA
margin recorded strong expansion to 44% in 4QCY10 versus 29% in 4QCY09 and 43.2% in
the previous quarter, primarily led by an absence of provisions for PRCL (meeting the minimum
guaranteed volume levels) and operating leverage due to strong volume growth.
Turns PAT positive. GPPL reported PAT of Rs111 mn in this quarter (first quarter of profits)—
aided by absence of PRCL provisioning and lower interest costs on debt repayment.
Strong container growth; higher realizations attributed to better tariffs and cargo mix
Container volumes continued to record a strong growth, up 29% yoy. However, bulk volumes
were down 23% yoy due to shift of Essar’s iron pellet cargo volumes to its own captive port. This
loss in volume was partially offset by higher fertilizer volumes. Average realization for the quarter
increased by about 18% yoy on the back of (1) volumes from recently added shipping lines with
better terms of agreements, and (2) favorable cargo mix—higher proportion of fertilizer cargo.
Full-year results broadly in line with estimates
For the full year ending December 31, 2010, GPPL reported revenues of Rs2.8 bn, up 29% yoy
(about 5% below our estimates). However, this was offset by better-than-expected EBITDA
margins of about 39.7% (our estimate of 37.8%). GPPL reported a net loss of Rs512 mn in
CY2010 versus our estimate of a loss of Rs552 mn.
Retain estimates and target price of Rs68/share; reiterate BUY
Reiterate BUY (TP: Rs68/share) on (1) likely strong near-term earnings, (2) attractive asset profile,
and (3) growing trade volumes amid capacity constraints.
Reports first quarter of positive net profit
GPPL reported 4QCY10 revenues of Rs875 mn, recording a strong 26% growth yoy from
Rs692 mn in 4QCY09. The growth was primarily driven by strong container volume growth,
up 29% yoy, and higher average realizations, up 18% yoy. Bulk volumes, however, declined
by about 23%. The company reported higher-than-expected EBIDTA margin of 43.9%
versus 28.9% in 4QCY09 (relatively flat on a sequential basis).
Strong EBITDA margin expansion and low interest costs (due to debt repayment of about
Rs300 mn) led to GPPLs first quarter of net profit of Rs111 mn.
Strong EBITDA margin expansion led by absence of PRCL provisions and operating
leverage—expansion higher than estimated
EBITDA margin recorded strong expansion to 44% in 4QCY10 versus 29% in 4QCY09 and
43.2% in the previous quarter. The strong expansion was primarily led by absence of
provisions to PRCL (meeting the minimum guaranteed volume levels) and operating leverage
due to strong volume growth. The margin expansion was higher than our expectations of
about 38% for the full year; implying 4Q margins of about 39%.
Higher realizations attributed to new container lines and cargo mix
The average realization per ton in 4QCY10 increased by about 18% yoy. The higher
realizations were attributed to (1) better terms on the agreements signed with the new
container shipping lines, and (2) favorable cargo mix—higher proportion of fertilizer cargo
which has higher realizations. CY2010 witnessed about 1-2 quarters of benefit from the
new shipping line; full-year impact would come in CY2011E.
Container volumes record strong growth; however, bulk volumes decline
Container volumes continued to record a strong growth, up 29% yoy to 142,000 TEUs in
4QCY10 versus 110,000 TEUs in 4QCY09. The strong growth was likely driven by addition
of several new container lines to its list of clients. For the full-year CY2010, GPPL container
volumes recorded a strong 45% growth to 466,000 TEUs, broadly in line with our estimates.
The decline in bulk volumes in 4QCY10 was led by lower iron pellet volumes which were
primarily from Essar. Essar has not built its own dedicated jetty. However, the management
has indicated that the port has almost completely made up for the loss in volumes. Note that
the company is operating at a high bulk capacity utilization of about 80%.
Port has outperformed the sector in terms of volume growth
In 4QCY10, Pipavav port recorded a total cargo growth of 7%. This is versus marginal
growth of just 0.7% for major ports in India. In the container segment, Pipavav port
recorded growth of 29% versus a yoy growth of 10.3% in the average container volumes
handled at major ports.
Full-year numbers broadly in line with estimates
For the full year ending December 31, 2010, GPPL reported revenues of Rs2.8 bn, up 29%
yoy (about 5% below our estimates). However, this was offset by better-than-expected
EBITDA margins of about 39.7% (our estimate of 37.8%). GPPL reported a net loss of Rs512
mn in CY2010 versus our estimate of a loss of Rs552 mn.
New liquid cargo agreement signed with Gulf Petrochemical
GPPL has recently signed a deal with Gulf Petrochemical allowing it to eventually build an oil
terminal at Pipavav port. This agreement is similar to the one signed with Aegis Logistics in
November 2010. Apart from revenues related to cargo handling at port, Gulf Petrochemicals
would also pay lease rentals to GPPL for the occupied land (for tankage farms).
GPPL management cited that the company is actively seeking/is in discussions with several
other firms to sign similar deals on the liquid cargo front. This will help increase the
utilization of the existing 65 mts berth available for liquid and LPG operations which is
currently under-utilized. Of the total 20 mn tons of liquid cargo capacity, Aegis and Gulf
Petrochemicals agreements will utilize about 1.2 mn tons.
The lease rentals from these agreements will start on an immediate basis. However, the full
impact of these agreements would kick in only once tank farms are set up; expected in the
last quarter of CY2011E or first quarter of CY2012E.
Retain estimates and target price; reiterate BUY
We retain our estimates and target price of Rs68/share comprised of (1) Rs60/share for the
core port business (FCFE valuation), (2) Rs2.6/share for its with Pipavav Rail Corporation Ltd
(PRCL, 1.5X book value), and (3) 50% of the calculated depreciated replacement value
receivable at the end of the concession period.
Our BUY rating on the company is based on (1) attractive asset profile, (2) strong likely nearterm
earnings growth led by volume growth, margin expansion and lower interest costs, (3)
the addition of several new shipping lines in the past few months shores up confidence in
achieving volume growth estimates, (4) long-term potential to add capacity at Pipavav port
led by availability of a large waterfront, and (5) ability to benefit from expected growth in
Indian trade volumes where capacities are constrained to keep pace with volume growth.
No comments:
Post a Comment