Mercantile Ports & Logistics Ltd Trading Update (1649Z)

TIDMMPL

RNS Number : 1649Z

Mercantile Ports & Logistics Ltd

10 January 2024

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the UK version of the EU Market Abuse Regulation (2014/596) which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended and supplemented from time to time.

10 January 2024

Mercantile Ports & Logistics Limited

   ("MPL"   or the   "Company"   and, together with its subsidiaries, the   "Group") 

Trading Update

For the vast majority of the year, the Company traded well and in line with expectations and further progress was made at Karanja. However, the recent acquisition of a port in the region had a short term impact on the trading volumes at Karanja in the month of December. As a result of this transaction, importers sought to clear stockpiles of existing supplies of coal at that port and that has meant that a number of coal importing customers of Karanja elected to take advantage of this short term dynamic and acquired coal from that port, rather than import coal through the Company's Karanja facility, as forecast. As a result, the Company expects Revenue for the year ending 31 December 2023 to be approximately GBP5.4m.

It is important to note that overall demand for coal in the region has not decreased and, therefore, the stockpiles of coal that were at the acquired port will need to be replenished and stored elsewhere. As such, the Company is confident that the volumes of coal that it had expected in December will be deferred to early 2024 and the Company confirms that market conditions and coal volumes have now normalised. In addition, the Company has visibility of a robust pipeline and expects to announce contracts for handling of new commodities in the coming weeks. The Company was pleased to complete its contract with Tata Daewoo in June of 2023 and is proud to have played an important part in the construction of the Trans Harbour Link, the country's longest bridge, which is due to be inaugurated next week by the Prime Minister of India. The high load bearing concretised ground at Karanja that has been vacated by Tata Daewoo is ideally suited to handle the Company's container business.

The Company is continuing to work with the lending consortium of state-owned banks in restructuring its debt facility. While this process has taken longer than originally envisaged, the Company continues to have an excellent relationship with its banks and remains confident of a facility with much more attractive terms being put in place.

Jeremy Warner Allen, Chairman of MPL stated that "We close our second full year of operations at the facility and while we are surprised by the short term impact on trading in December, we are confident that this is a deferral that will flow through as revenue for the Company in 2024. The Company enters 2024 with real momentum and the Board expects significant progress at its facility in the coming months."

- Ends -

For further information, please visit www.mercpl.com or contact:

 
 MPL                           c/o SEC Newgate 
                                [phone] 
 Cavendish Capital Markets     Stephen Keys 
  Limited                       [phone] 
  (Nomad and Broker) 
                              ------------------------------ 
 SEC Newgate                   Elisabeth Cowell/ Bob Huxford 
  (Financial Communications)    [phone] 
                                [e-mail] 
                              ------------------------------ 
 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

TSTFFFILLTIAIIS

(END) Dow Jones Newswires

January 10, 2024 02:00 ET (07:00 GMT)