Adani’s results tell us the company will not develop in Australia

18 February 2017 12:55 pm

Adani, the Indian company that for years has championed construction of the proposed Carmichael project in Australia, a multi-billion-dollar undertaking that would purport to supply coal to India, is in trouble.

According to its 3QFY2017 quarterly results to December 2016, pretax profit excluding one off extraordinary items was down sharply year on year.

Drilling into the numbers we can see, the year-to-date pretax profit is down 37 per cent year on year. An 11 per cent increase in financing costs seems to have done the damage.

The way Adani announced it to the media was by declaring its profits had jumped 62 per cent but that’s an accounting change reflecting Adani Mining booking a profit on taking over Rio Tinto’s long term Abbot Point Coal Terminal take-or-pay (ToP) liability.

The ongoing losses relating to the Carmichael project in Australia appear to be capitalized into the balance sheet in the six year deferred expectation that this project will still proceed.

Clearly Adani’s finances are stretched which is why they are waiting for billion dollar loan from the Australian government.

Adani’s Carmichael mine poses a threat to the Great Barrier reef and Queensland’s tourism industry.

The numbers for Adani’s book tell us that the company is so stretched now financially that it won’t have the capacity to undertake the Carmichael Project.

The bottom line from my reading of it is that Adani is well-versed in running a business in India but has little experience running overseas operations. Carmichael is too big a risk. It won’t go ahead.

It will be interesting to see how long it takes for the Australian government, and for that matter the mainstream Australian media, will pick it up.

2017

September

16 Sep 2017 - Australia’s energy crisis shows the stupidity of privatisation

09 Sep 2017 - Why climate change will devastate Florida

July

16 Jul 2017 - Laws of mathematics don’t apply to Australia: Malcolm Turnbull

June

17 Jun 2017 - Political backlash over the Grenfell fire

11 Jun 2017 - A win for Macron is a lesson for Theresa May

04 Jun 2017 - Attacks in London could change the election

May

28 May 2017 - Why Donald Trump will survive and be re-elected in 2020

20 May 2017 - Will the Mueller probe examine Trump’s Russian business ties?

13 May 2017 - Hypocrisy over Chloe Shorten’s necklace

06 May 2017 - Macron vs Le Pen: France is no longer one country

April

29 Apr 2017 - Turnbull government attacks banks over Adani

23 Apr 2017 - Why the French election is important

08 Apr 2017 - Russian navy moves in

01 Apr 2017 - Australia is one of the world’s worst money laundering property markets

March

19 Mar 2017 - Peter Dutton goes poofter bashing

04 Mar 2017 - Trump will take the market to a fiscal bloodbath

February

26 Feb 2017 - Trump’s mental condition

18 Feb 2017 - Adani’s results tell us the company will not develop in Australia

11 Feb 2017 - Why the Coalition’s “clean coal” plan is crap

04 Feb 2017 - It’s Trump versus the courts

January

27 Jan 2017 - The cost of Trump's wall on consumers

21 Jan 2017 - A look at Europe's future

20 Jan 2017 - Can Trump make America great again?

16 Jan 2017 - Trump parallels with Iraq


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