Essar Ports · PDF file¾OISD (Oil Industry Safety Directorate) audit carried out successfully. First ever OISD audit for a private terminal in India ... 105 173 0 50 Q1 FY11 Q1 FY12

Essar Ports LtdEssar Ports LtdPerformance UpdatePerformance UpdateQuarter ended 30th June 2011

Essar Ports Management Teamg

NameName Brief BiographyBrief Biography

Mr. Agarwal, CA, ICWA and CS, has ~26 years of experience in industries like Retail, BPO, Telecom, Shipping and Logistics, etc.He has been associated with the Group since 1997 and was the ED of Essar Shipping Limited (ESL) from 1998-2002. Post that, he has held various positions like CEO of The Mobile Store Limited, Telecom Towers and Infrastructure Limited and Aegis Communications, and CEO & MD of Essar Shipping Ports & Logistics Ltd.

Mr. Agarwal, CA, ICWA and CS, has ~26 years of experience in industries like Retail, BPO, Telecom, Shipping and Logistics, etc.He has been associated with the Group since 1997 and was the ED of Essar Shipping Limited (ESL) from 1998-2002. Post that, he has held various positions like CEO of The Mobile Store Limited, Telecom Towers and Infrastructure Limited and Aegis Communications, and CEO & MD of Essar Shipping Ports & Logistics Ltd.

Pic

Mr. Rajiv AgarwalMD

Mr. Rajiv AgarwalMD

g , & pp g & gPrior to Essar, he was CEO of IndoRama Textiles, CEO & Jt MD of Modi Korea Telecom. He has won CEO of the Year Award – 2009 - Asia Retail Congress

g , & pp g & gPrior to Essar, he was CEO of IndoRama Textiles, CEO & Jt MD of Modi Korea Telecom. He has won CEO of the Year Award – 2009 - Asia Retail Congress

Mr. Sinha, B.Sc. Engg (Mech) from BIT, Sindri and MBA from FMS, Delhi, has 36 years of experienceHe joined Essar as President Pipelines in 2003 and since September 2006 he has been the CEO of the PortsMr. Sinha, B.Sc. Engg (Mech) from BIT, Sindri and MBA from FMS, Delhi, has 36 years of experienceHe joined Essar as President Pipelines in 2003 and since September 2006 he has been the CEO of the PortsPi

Mr. K. K. SinhaCEO

Mr. K. K. SinhaCEO

He joined Essar as President – Pipelines in 2003 and since September 2006 he has been the CEO of the Ports businessHe started his career in 1973 with Bokaro Steel Ltd. Subsequently he joined Indian Oil Corporation Ltd. and rose to the position of Executive Director. Thereafter, he joined ‘Petronet India Ltd.’ as Managing Director.

He joined Essar as President – Pipelines in 2003 and since September 2006 he has been the CEO of the Ports businessHe started his career in 1973 with Bokaro Steel Ltd. Subsequently he joined Indian Oil Corporation Ltd. and rose to the position of Executive Director. Thereafter, he joined ‘Petronet India Ltd.’ as Managing Director.

Pic

Mr Shailesh SawaMr Shailesh Sawa

Mr. Sawa, CA & ICWA, has ~24 years of experience in the fields of Finance and Capital Markets.He has been associated with the Group since 1994 and has held many positions in various Group companies viz. India Securities Limited, Essar Power Limited and Essar Oil Limited (EOL).He has played a leading role in restarting of the refinery project, restructuring EOL’s financials, fund raising required for

Mr. Sawa, CA & ICWA, has ~24 years of experience in the fields of Finance and Capital Markets.He has been associated with the Group since 1994 and has held many positions in various Group companies viz. India Securities Limited, Essar Power Limited and Essar Oil Limited (EOL).He has played a leading role in restarting of the refinery project, restructuring EOL’s financials, fund raising required for

Pic

Mr. Shailesh SawaCFO

Mr. Shailesh SawaCFO completing the refinery and further expansion of refinery in 2007completing the refinery and further expansion of refinery in 2007

Capt Subhas DasCapt Subhas Das Capt Deepak SachdevaCapt Deepak Sachdeva Capt Rajen SacharCapt Rajen Sachar Mr Venkat RaoMr Venkat Rao

2

Capt Subhas Das CEO Hazira Port

Capt Subhas Das CEO Hazira Port

Capt Deepak Sachdeva COO Vadinar Port

Capt Deepak Sachdeva COO Vadinar Port

Capt Rajen SacharCOO Salaya Port

Capt Rajen SacharCOO Salaya Port

Mr Venkat RaoCOO Paradip PortMr Venkat Rao

COO Paradip Port

Ports in India – A High Growth Market

3200

3000

3500

g

Projected Total Cargo Traffic Growth Commodity-wise Outlook

452450500 CAGR-8%

827

1355

2500

660948

1620

1000

1500

2000

2500

3000

MTP

A

307

101139

114

248194 210

150200250300350400450

MTP

A CAGR-13%CAGR-7%CAGR-20%

570827660

0

500

1000

2005-06 2009-10 2014-15 (P) 2019-20 (P)Traffic Capacity

101

050

100

POL Coal Iron ore Container2009-10 2014-15(E)

Traffic Capacity

Capacity Utilization at Major PortsIndian economy to continue with 8-9% GDP growth rate- Import and Export to continue rising in line with GDP growthThe capacity utilisation of over 90%

in India is significantly higher than the

Emerging TrendsSource: Crisil Research Ports Annual Review Source: Crisil Research Ports Annual Review

- Strong demand drivers to support long term steady cargo- Upcoming projects consisting of major coastal power plants,

refineries, steel plants etc. to meet the requirements of a growing economy

Consistently high capacity utilization levels at major ports has t d d fi it d f / l t

in India is significantly higher than the international norm of 70%

281384 424 464

519 531 561

96%

90%

93%92%

98%

92%91%

90%

95%

100%

300400500600

%MTP

A

created a definite need for new / larger ports- Higher berth occupancy leads to longer waiting and turnaround time

– hence need for adding significantly large capacitiesPrivate sector has assumed a dominant role in new ports capacity additions since 1999

Almost 67% of the expenditure in 11th plan is expected to come

75%

80%

85%

0100200

FY01 FY05 FY06 FY07 FY08 FY09 FY10

MM

Significant capacity addition seen as coming from the private sector

- Almost 67% of the expenditure in 11th plan is expected to come from private sector

3

Source: Indian Ports AssociationTraffic at Major Ports Capacity Utilization

Essar Ports: Overview

Operational

58* MTPA Liquid Terminal at Vadinar

Vadinar

58* MTPA Liquid Terminal at Vadinar30 MTPA Dry Bulk / General Cargo Terminal at Hazira

Salaya

Paradip I (Iron ore)16 MTPA Iron Ore Berth at Paradip20 MTPA Dry Bulk Terminal at Salaya

Under Construction

HaziraINDIA

BAY of BENGAL

Paradip II (Coal)

20 MTPA General Cargo Terminal (expansion) at Hazira

Under Development

INDIAN OCEAN Hinterland for Essar Ports

(expansion) at Hazira14 MTPA Coal Terminal at ParadipLiquid Storage Terminal (expansion) at Vadinar

Hinterland for Essar Ports

3 stand-alone ports on the West Coast and 2 terminals on the East Coast of IndiaPresence in strategic locations of east and west coast High visibility on revenue with long term Take-or-Pay contracts

* 12 MTPA Vadinar Liquid Terminal Expansion commissioned in April 2011

4

High visibility on revenue with long term Take or Pay contracts Current capacity of 88 MTPA being scaled up to 158 MTPA by FY 2014. Further scalability possible at most locations High operating margins at both the operating ports

Essar Ports: Key Highlights for the Quartery g g

12 MMTPA E i P j i i d V di l di i d i12 MMTPA Expansion Project commissioned at Vadinar, leading to increased earnings

Record handling of 11.2 MMT achieved during the quarter as against 9.83 MMT in Q1 FY11

Average realization per ton improved from Rs 173 in FY11 to Rs 220 in Q1 FY12 based on higher tariff and increased earnings post commissioning of Vadinar Expansion

Revenue increased by 61% to Rs 278.48 crore as against Rs 172.97 crore in Q1 FY11 and EBITDA increased by 75% to Rs 220.29 crore as against Rs 125.96 crore in Q1 FY11

PAT of Rs 39.61 crore achieved as against Rs 3.48 crore in Q1 FY11

5

Hazira: Highlightsg g

Cargo handled increased by 36% to 2.8 MMT during the quarter, as against 2.06 MMT cargo during Q1 FY11.

ISO 9001:2008 (Quality Management), ISO 14001:2004 (Health ISO 9001:2008 (Quality Management), ISO 14001:2004 (Health & Safety), OHSAS 18001:2007 (Environment) awarded to EBTL Hazira

Hazira Terminal achieves “Zero LTI” in its first year of operations

Third party cargoes handled: L&T, Torrent Power, Bhatia International

The largest ship handled at the terminal was 151,000 dwt Capesize MV Badri Prasad on 4th May 2011

61 ships handled at Hazira during the quarterp g q

6

Vadinar: Highlightsg g

Handled 8.4 MMT of cargo as against 7.7 MMT handled in Q1 FY11

SPM hose change-out carried out successfully

MOU signed with BORL for interconnection of crude oil pipelines

Received Green Tech Award for Safety Management

OISD (Oil Industry Safety Directorate) audit carried out successfully. First ever OISD audit for a private terminal in India

72 ships called at the Terminal during the quarter (18 ships called at the SPM and 54 ships at the Jetty)

7

Essar Ports: Increasingly diversified cargo split with higher realizationea at o

Liquid Intermediate,

0 79Liquid

Dry Bulk, 1.94 BreakBulk, 0.12

Liquid Product (Road/Rail), 1.3

2

0.79 Dry Bulk, 2.29

BreakBulk, 0.49

Containers, 0.01

Liquid Product (Road/Rail), 1.21

Intermediate, 1.6

Crude (SPM), 3.74

Liquid Product (Jetty), 1.92

Project

Crude (SPM), 3.43

Liquid Product (Jetty), 2.16

Q1 FY11: Total Volume 9.83 MMT

Cargo, 0.01

Q1 FY12: Total Volume 11.2 MMT

A li ti i d f R 173 / MT t R 220 / MT b d hi h t iff f t d i d

8

Average realization increased from Rs 173 / MT to Rs 220 / MT based on higher tariff for new cargo segments and increasedearnings post commissioning of 12 MMTPA expansion project at Vadinar in April 2011

Growth in numbers backed by take or pay contractsy p y

250

300

223

278

100

150

200

250

105

223 173

0

50

100

Q1 FY11

Q1 FY12

Minimum Guaranteed Revenue (Rs Cr) Actual Revenue (Rs Cr)Minimum Guaranteed Revenue (Rs Cr) Actual Revenue (Rs Cr)

FY 11 FY12Actual

Volume (MMT)

Billed Volume* (MMT)

Revenue (Rs Crore)

Rate(Rs / MT)

ActualVolume (MMT)

Billed Volume* (MMT)

Revenue (Rs Crore)

Rate(Rs / MT)

Vadinar 7.77 7.77 119 154 8.4 8.4 177 211

Hazira 2.06 2.25 50 220 2.8 4.28 103 241

Total 9 83 10 02 173 173 11 2 12 68 278 220

9

Minimum guaranteed take or pay earnings have increased from 60% of revenues in Q1 FY11 to 80% of revenues in Q1 FY12

Total 9.83 10.02 173 173 11.2 12.68 278 220 * Billed volumes based on Take or Pay contracts

Essar Ports: Strong growth in performance

R (R C )

g g p

300

Revenue (Rs Crore)

278

250

EBITDA (Rs Crore)

220

200

250

177173

200

146126

100

150

119100

150

88

146

50

100

50

10350

34

73

0Q1 FY11 Q1 FY12

Hazira Vadinar

0Q1 FY11 Q1 FY12EBITDA

Margin 72% EBITDA

Margin 79%

10

Hazira Vadinar

75% Increase in EBITDA based on: 1. increased volumes, 2. improved realization, and 3. higher EBITDA margins

Paradip: progressp p g

Conveyor gallery erection at Paradip I

Paradip I (Iron Ore)Paradip I (Iron Ore)59% project completed. Estimated COD: Q4 FY11-12

Stacker reclaimer erection in progress

Shiploader is erected, stackyard development is under progress

11

Conveyor erection is under progress

Salaya: progressy p g

Construction work at Salaya

36% project completed. Estimated COD: Q4 FY13-14

Ship unloaders are delivered

1 Stacker reclaimer erected, erection of other 2 are under ,progress

Jetty construction and conveyor erection are under progress

12

Environment and CRZ clearance are received. Forest clearance awaited for part of the project

Snapshot of Portfolio p

Port Cargo Type

Capacity (MMTPA)

CoDDominant Customer InfrastructureCurrent Proposed

Vadinar Liquid -Crude, Product

58 Op. Essar Oil

SPM - Draft 32mBerth A 305m - Draft 20mBerth B 300m - Draft 16mRail & Road GantriesCrude Product & IntermediateCrude, Product & Intermediate Tankages

Hazira I Dry Bulk 30 Op. Essar Steel Draft - 14mBerth - 550m

Paradip - Iron Ore Iron Ore 16 Q4 FY12 Essar Steel,

MerchantDraft - 14mBerth – 230 m

Salaya Coal 20 Q4 FY 14 Essar Power, Merchant

Draft - 14mBerth - 385m

Paradip – Coal Coal 14 TBD Merchant Draft - 17mBerth - 370m

Hazira II Dry Bulk/ Container 20 TBD Merchant Draft - 16m

Berth 700mContainer Berth - 700m

Vadinar (Storage) Crude TBD Merchant Crude & Product Tankages

Total 88 70

13

Essar Ports: Financial Performance

(Figures in Rs Crore)

Q1 FY11 Q1 FY11 Q1 FY12Highlights for the quarter

Year on year revenue saw a growth of61% to Rs 278.48 crore and EBITDA

Q1 FY11 Q1 FY11 Q1 FY12ESPLL(Consol.)

ESPLL(Ports only)

Essar Ports Ltd

(Includes Shipping

Ports, Oilfields Services &

g g q

saw a growth of 75% to Rs 220.29crore on account of higher tariff andincreased earnings postcommissioning of Vadinar Expansion

Services & Logistics)

Total Income 892.2 172.97 278.48

Total Expenses 554.3 47.00 58.18

Based on the above, PAT increasedto Rs 39.61 crore as against a profitof Rs 3.48 crore for the previous year(for Ports only within the earlier

EBITDA 337.9 125.96 220.29

EBITDA Margin 38% 73% 79%

Interest and Finance Expenses 158.2 76.41 97.39

P fit B f D i ti d T 179 7 49 55 122 90 (for Ports only within the earlierconsolidated ESPLL)

Debt as on June 2011 (Rs Crore)

Profit Before Depreciation and Tax 179.7 49.55 122.90

Depreciation 116.8 38.49 51.24

Profit Before Tax 62.8 11.06 71.67

Tax 19 5 3 71 23 19 Operating 3,324 Projects 1,646 TOTAL 4,969

Tax 19.5 3.71 23.19

Adjustment for Share of Minority Interest 3.9 3.87 8.87

Profit After Tax 39.5 3.48 39.61

14

Note: Financials reported as per Indian GAAP

Analyst Contactsy

Mr. Shailesh SawaDirector FinanceEssar Ports LimitedEssar Ports LimitedTel: + 91 22 6660 1506 / + 91 98197 30120Email: [email protected]

Mr. Anshumali DwivediHead – Investor RelationsEssar Ports LimitedTel: + 91 22 6660 1100 / + 91 98339 45648Email: [email protected]

15

Legal Disclaimer g

“This presentation is for information purposes only and does not constitute an offer, solicitation or advertisement withrespect to the purchase or sale of any security of Essar Ports Limited (the “Company” or “EPL” or “Essar Ports Limited”)and no part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever.

This presentation is not a complete description of the Company. Certain statements in this presentation contain words orphrases that are forward looking statements. All forward-looking statements are subject to risks, uncertainties andassumptions that could cause actual results to differ materially from those contemplated by the relevant forward lookingstatement. Any opinion, estimate or projection herein constitutes a judgment as of the date of this presentation, and therecan be no assurance that future results or events will be consistent with any such opinion estimate or projection Thecan be no assurance that future results or events will be consistent with any such opinion, estimate or projection. Theinformation in this presentation is subject to change without notice, its accuracy is not guaranteed, it may be incomplete orcondensed and it may not contain all material information concerning the Company. We do not have any obligation to, anddo not intend to, update or otherwise revise any statements reflecting circumstances arising after the date of thispresentation or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition.

All information contained in this presentation has been prepared solely by the Company. No information contained hereinhas been independently verified by anyone else. No representation or warranty (express or implied) of any nature is madenor is any responsibility or liability of any kind accepted with respect to the truthfulness, completeness or accuracy of anyinformation, projection, representation or warranty (expressed or implied) or omissions in this presentation. Neither theCompany nor anyone else accepts any liability whatsoever for any loss, howsoever, arising from any use or reliance on thisp y y p y y y , , g ypresentation or its contents or otherwise arising in connection therewith. This presentation may not be used, reproduced,copied, distributed, shared or disseminated in any other manner.

The distribution of this document in certain jurisdictions may be restricted by law and persons into whose possession thispresentation comes should inform them about, and observe, any such restrictions.”

16