Adani Flagship’s Net Slips 49% as Coal Trading Unit Falters
(Bloomberg) -- Adani Enterprises Ltd., led by billionaire Gautam Adani, reported a 49% fall in quarterly profit as weakness in its coal trading business outweighed gains in the airport and mining units. Shares fell.
Net income at the Adani Group’s flagship was 7.34 billion rupees ($83.8 million) for the quarter ended June 30, according to an exchange filing Thursday. There weren’t enough brokerages with profit estimates to generate an average forecast.
Revenue slipped 14% to 219.6 billion rupees, missing estimates. While total costs were down 12% to 209.7 billion rupees compared with the same period last year, gross debt swelled 53% to 864.56 billion rupees on account of resources deployed toward incubating infrastructure assets.
The disappointing earnings sent the stock lower by 4% at close on Thursday, the most in nearly three months. Investors are also awaiting clarity on the outcome of a US bribery probe that ensnared the group’s chairman last year.
The ports-to-power conglomerate is, meanwhile, back to pursuing growth opportunities locally as well as globally, with the tycoon visiting China and Vietnam in recent weeks.
At home, the company expects its operating profit, or earnings before interest, tax, depreciation and amortization, to strengthen this year with assets such as the Navi Mumbai airport, Ganga expressway and a new copper smelter are expected to come online, Adani said in a statement.
The group’s airports business delivered an exceptional 61% year-on-year growth in Ebitda, according to the statement.
Coal Disappoints
Income at Adani Enterprises’ Integrated Resource Management unit, which mostly consists of coal trading and contributes the largest chunk to the firm’s overall revenues, fell 27% to 78.79 billion rupees.
Sales at the airports unit surged 26% to 27.17 billion rupees, mining revenue was up 34% to 11.54 billion rupees, while the “new energy ecosystem,” housed in Adani New Industries Ltd., saw revenue declining 11% to 39.83 billion rupees.
The group flagship expects to get 108.7 billion rupees by selling its residual stake in AWL Agri Business Ltd. as it exits non-core activities to focus on its mainstay infrastructure businesses like renewables and airports.
Completing the stake sale, announced in January, will free cash in hand for investments in the group’s core infrastructure ventures.
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