Essar Ports Annual Report and Financials

Essar ports Limited Balance Sheet (Rs in Lakhs)

 Essar ports Limited Profit & Loss Statement (Rs in Lakhs)

 Essar ports Limited Cash Flow Statement (Rs in Lakhs)

Here is a summary of the Cash Flow Statement for the years 2024 and 2023:

Operating Activities: The company experienced a substantial increase in profit before tax from continuing operations, rising from ₹12,985.34 lakhs in 2023 to ₹22,577.96 lakhs in 2024. However, this positive performance was offset by a larger loss from discontinued operations, which widened from ₹2,078.72 lakhs in 2023 to ₹9,122.57 lakhs in 2024. Additionally, the share of loss from associates reversed sharply, from a profit of ₹9,834.63 lakhs in 2023 to a loss of ₹2,260 lakhs in 2024.

Depreciation and amortisation expenses decreased slightly, while there was a significant gain on the disposal of a subsidiary amounting to ₹24,592.88 lakhs, which was not present in the previous year. Finance costs increased notably from ₹7,915.20 lakhs to ₹12,188.42 lakhs. The net unrealised loss on foreign currency translation and transactions, and gain on sale and fair valuation of mutual funds were new entries this year.

Operating profit before working capital changes decreased to ₹5,121.44 lakhs from ₹9,291.95 lakhs in 2023. Changes in working capital saw an increase in receivables and a reduction in payables and other liabilities. This led to a decrease in cash generated from operations to ₹2,690.60 lakhs from ₹8,848.56 lakhs. After accounting for income tax payments, the net cash flow from operating activities fell to ₹2,714.63 lakhs from ₹8,612.89 lakhs.

Investing Activities: In investing activities, the company’s net cash generated increased to ₹2,027.70 lakhs in 2024 from ₹1,137.29 lakhs in 2023. This was primarily due to a significant ₹19,387.69 lakhs received from the sale of investments and a substantial refund of unsecured loans to related parties, which outweighed the large investment in Compulsory Convertible Debentures (CCDs) of an associate and other capital expenditures.

Financing Activities: The financing activities showed a substantial net outflow of ₹7,892.01 lakhs compared to ₹6,349.20 lakhs in 2023. This outflow was driven by higher finance costs paid and a significant repayment of long-term borrowings amounting to ₹53,286.75 lakhs. The company also received proceeds from unsecured loans and repaid loans to related parties.

Net Change in Cash: Overall, the net decrease in cash and cash equivalents amounted to ₹3,149.68 lakhs in 2024, reversing the previous year’s increase of ₹3,400.98 lakhs. The cash and cash equivalents at the end of the year fell to ₹448.01 lakhs from ₹3,597.69 lakhs, indicating a tighter cash position despite positive net cash flow from investing activities.

 Financial Ratios of Essar ports Limited

Here is a summary of the financial and operational metrics for Essar ports Limited for the year 2024 and 2023:

Current Ratio: The current ratio, which stands at 15.74 in 2024 compared to 12.11 in 2023, measures the company’s ability to cover its short-term liabilities with short-term assets. The increase indicates that the company’s liquidity position has strengthened over the year. A higher current ratio means that the company is better positioned to meet its short-term obligations, reflecting improved operational efficiency or a stronger buffer of current assets relative to current liabilities.

Debt-Equity Ratio: The debt-equity ratio decreased significantly from 0.11 in 2023 to 0.02 in 2024. This ratio measures the proportion of a company’s debt compared to its equity. A lower ratio indicates a stronger equity position relative to debt, suggesting the company is less reliant on borrowed funds to finance its operations. The dramatic decrease suggests a substantial reduction in debt or a significant increase in equity, highlighting a stronger financial stability and lower financial risk.

Debt Service Coverage Ratio: For 2024, the debt service coverage ratio is 9.38, which measures the company’s ability to service its debt (interest and principal repayments) with its operating income. The absence of this ratio in 2023 means it was not applicable or the information was not available. A ratio of 9.38 indicates a robust ability to cover debt payments, suggesting strong cash flow from operations and low risk of default.

Return on Equity (ROE) Ratio: The return on equity ratio is 0.09 in 2024, up from 0.08 in 2023. ROE measures the profitability of the company in relation to shareholders’ equity. The increase suggests a slight improvement in the company’s efficiency in generating profits from shareholders’ funds. Although the change is modest, it reflects a positive trend in utilizing equity to generate earnings.

Trade Receivables Turnover Ratio: The trade receivables turnover ratio decreased from 6.92 in 2023 to 1.38 in 2024. This ratio measures how efficiently the company collects receivables from its customers. The significant drop indicates that the company is collecting its receivables more slowly than in the previous year, which could suggest issues with credit management or longer credit terms extended to customers.

Trade Payables Turnover Ratio: The trade payables turnover ratio increased from 0.52 in 2023 to 0.9 in 2024. This ratio measures how quickly the company pays off its suppliers. An increase implies that the company is paying its suppliers more promptly or has improved its management of trade payables, which could be a sign of stronger supplier relationships or better cash flow management.

Net Capital Turnover Ratio: This ratio decreased from 0.14 in 2023 to 0.04 in 2024. The net capital turnover ratio measures how efficiently the company utilizes its net capital (equity plus long-term debt) to generate revenue. The decline suggests that the company is generating less revenue per unit of net capital, possibly indicating inefficiencies or a reduction in sales relative to the net capital employed.

Net Profit Ratio: The net profit ratio improved significantly from 2.01% in 2023 to 5.95% in 2024. This ratio measures the percentage of revenue that turns into profit. The substantial increase indicates enhanced profitability, suggesting better cost control, higher revenues, or both, leading to a more effective conversion of sales into actual profit.

Return on Capital Employed (ROCE): The return on capital employed remained stable at 0.08 for both years. ROCE measures the company’s profitability relative to the capital employed. A stable ratio indicates consistent efficiency in generating profits from capital, reflecting stable operational performance despite changes in other financial metrics.

Return on Investment (ROI): The return on investment also remained constant at 0.08 across both years. ROI measures the return generated on the total investments made by the company. The stability of this ratio suggests consistent performance in terms of generating returns on investments, indicating that the company’s investment strategies have not significantly changed in effectiveness over the year.