Mercantile Ports shares jump as it handles first Navi Mumbai container

15th Feb 2023 15:56

(Sharecast News) - Mercantile Ports & Logistics (MPL) announced the successful handling of the first container freight at its port and logistics facility in Navi Mumbai, Maharashtra, India on Wednesday.

The AIM-traded firm said it was a significant milestone, as it expanded the range of cargoes handled to include steel, cement, olivine flux, project cargo and coal.

While the initial volumes of container freight were small, the company said it was optimistic over the future potential for growth in the area.

The MPL facility was strategically located in Karanja, with connectivity to the regional road network and more efficient evacuation characteristics.

Additionally, MPL said it had signed a memorandum of understanding (MoU) with the operator of a terminal at a major international gateway port and a logistics company.

It said the MoU was focussed on collaboration in the movement of shipping containers and vehicles by coastal waterways between the two facilities.

That, it said, would enable MPL to expand its reach, and leverage the strategic advantages of its Karanja facility.

The three parties would collaborate to explore and evaluate the business of handling container trailers and cargo vehicles between the two facilities, with the goal of reaching a definitive agreement before the end of the year.

MPL said it expected the development to represent "significant opportunities", leading to an additional revenue line and further progress in its strategy to embed the Karanja facility into Mumbai's logistical infrastructure.

While the development was not expected to have a material impact on its financial performance in the current financial year, MPL's directors said they believed that it represented a "significant opportunity" for future growth.

The firm said it was continuing to be committed to developing its port and logistics facility, as it aimed to become a leading player in the Indian port and logistics industry.

"These are pleasing developments, which see us continue the positive momentum we achieved in 2022 at our facility at Karanja," said chief executive officer Jay Mehta.

"The team at Karanja was delighted to welcome our chairman, other board members and our nomad and broker to the site last week, which coincided with another 180 metre section of the Trans Harbour Bridge, manufactured at the facility by our customer-partners, TATA-Daewoo, leaving the site by barge."

Mehta said India and its economy had been described as a "true bright spot" in the midst of a global downturn, adding that MPL, with support from the government, was "well-placed" to benefit from the positive economic environment.

"I look forward to providing further updates on this, and other pipeline activities, in due course."

At 1354 GMT, shares in Mercantile Ports & Logistics were up 22.45% at 7.5p.

Reporting by Josh White for Sharecast.com.