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( 07/05/2018 10:24)
Adani Ports's FY18 results in line with expectations: Moody’s

Moody's Investors Service, a global rating agency, has said that Adani Ports and Special Economic Zone Limited's (APSEZ) (Baa3 stable) results for full year ending March 2018 (FY2018) are within Moody's expectations.

In FY2018, APSEZ's reported revenues increased by 34 per cent year-on year (YoY) to INR 113 billion. Similarly, APSEZ's reported EBITDA increased by 32 per cent YoY to INR 72.1 billion. The ports business revenue and EBITDA growth in FY2018 was 7 per cent and 10 per cent respectively.

"FY2018 performance for APSEZ was driven by 7 per cent year on year (YoY) growth in cargo volumes and a strong 5.4x growth in Special Economic Zone (SEZ) income compared to FY2017" says Abhishek Tyagi, a Moody's Vice President and Senior Analyst. The 7 per cent YoY growth in traffic to 180 million tonnes in FY2018 was mainly contributed by a strong 20 per cent YoY growth in container traffic which represented 41 per cent of the total volumes. Such performance is in line with the company's strategy of reorienting its volume away from coal volumes.

Based on APSEZ's FY2018 results, its estimated financial leverage, as measured by FFO/debt was around 22% and the FFO interest coverage stood at approximately 5.4x for FY2018. These ratios are based on reported results and do not reflect Moody's standard adjustments but includes the outstanding amount of a debt facility to Australian entity Mundra Port Pty Ltd (MPPL) and guaranteed by APSEZ, said the rating agency.

Over the next 12-18months, Moody’s expect APSEZ's FFO/debt ratio to be in the range of 15 per cent -20 per cent, providing support for APSEZ's credit profile.

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