Gujarat Pipavav Port Ltd

NSE:GPPL

Earnings Call Transcript 2022-Q4

[Operator]

Hello, everyone. Welcome to Gujarat Pipavav Port's 4Q FY '22 Earnings Call. From the management side today, we have with us Mr. Sorensen, Managing Director; and Mr. Breed, Chief Financial Officer. Thank you, and over to you, sir, for your opening remarks.

[Jakob Sorensen, executive]

Thank you very much, and good morning, everybody. We are dialing in from Copenhagen in Denmark. So we have just finalized our Board meeting. And as you have seen, we have uploaded the results for the financial year '21, '22.

And my comments would start by saying that we had just now 1 year anniversary of the Cyclone Tauktae, which hit us in the -- on the 17th of May 2021, where it had made landfall somewhere between Pipavav and Diu. And it caused significant material damages, but I'm very happy that we actually had no fatalities nor any serious injuries in the port. Nevertheless, we spent quite a lot of efforts in the latter part of 2021 recovering from the cyclone. Immediately, efforts were made to get communication and electricity reinstalled. And I'm also happy to say that on the 1st of June 2021, we already -- 2 weeks after the cyclone hit, we managed to take the first vessel into the port. And I also probably don't need to remind anyone that this was all still during the COVID restrictions that we were facing.

We believe that during the cyclone, it cost us a loss of around 60,000 TEUs in Container business. However, we also have to say that on the Bulk business, volumes have been very brisk. And even after the cyclone, we've seen Bulk volumes, both Dry Bulk, minerals and fertilizers as well as LPG rising and having a continued strong performance.

One thing that we are very proud of is as well that in 2021 we started evacuation of LPG via rail, and we have just had the celebration of rake #300 on LPG evacuation. The DFC is also live to and from Pipavav, and we are the first port in Gujarat that's connected with electric rail connectivity, and we continue to work on the value propositions for that and communicate to customers what the benefits are in that respect.

As you will see, I will not go into the numbers here, but we have a year-on-year comparison, and EBIT is down to 3%. And then, as you have probably noticed, the profit is down by 11%. There's, of course, deeper explanations, which we're going to talk about. But I think the 11% corresponds basically to the drop also about 10% in container volumes that's directly attributed to the cyclone. Otherwise, performance is actually satisfactory.

So I'll pause here and be ready for questions.

[Santosh Breed, executive]

Maybe just a quick comment from me on the financial results. I think Jakob has given you a good overview, but let me run through the financial results quickly with you. So in comparison to the same quarter last year, the Container volumes were low by 16%, and the drop was mainly due to the coastal volumes. So if you remember, last year due to lockdown, there was multiple states actually went into lockdown, and there was impact on the domestic cargo movement by road. And that's why the diversion of cargo from road to sea.

With the situation getting back to normal, we have seen that momentum getting back today. And this is also because of diversion of tonnage from coastal trade to EXIM trade because the shipping line wanted to take advantage of the increased freight rate. So that's the reason why we see an impact on the coastal volume.

The EXIM volumes were lower by 5% as compared to the same quarter last year. The Dry Bulk volume continues to be strong. We were 43% up, with a total volume of 1.46 million tonnes, which came mainly from the minerals and fertilizer imports.

Liquid volume was also higher by 44%. This was based on a strong performance from LPG, and this was driven by the efficient rail evacuation of LPG cargo. So we believe that this volume would continue to maintain its run rate in the coming quarter as well.

RoRo also continued to maintain its quarter run rate of 6,000 to 7,500 cars, but we expect -- we don't really expect a significant increment in the coming quarters, and it would remain in a similar range. The revenue was at INR 2,207 million and was higher by 14%, mainly because of the higher Dry Bulk and Liquid volumes and also better realization coming from the Container business due to tariff increase, which was taken in February. And also because of the favorable cargo mix, as I mentioned earlier, it is more EXIM volumes as compared to coastal.

EBITDA was higher by 11% due to higher revenue, and EBIT was higher by 19%, mainly due to a lower depreciation charge. Margin was at 58%, lower by 200 basis points. This was mainly due to the cargo mix. As we have discussed in the earlier calls, when we have a higher Bulk volume, there is some impact to the margin because as compared to Containers, then Bulk comes at a lower margin.

Exceptional item basically is for the cyclone restoration cost. There's a recovery of the insurance claim during the quarter. So this is a net positive of INR 53 million.

Our net profit was INR 724 million and was higher by 11%. We now have fully utilized our MAT credit, and we will be moving to a lower tax of 25.168% from the financial year '22, '23.

On the full year performance, the revenue for the financial year '21, '22 has increased by 1% based on the higher Bulk volume and better realization from Container business, as I mentioned earlier.

EBITDA has dropped by 2%, and the margin was lower by 300 basis points. This was mainly account of the cargo mix and also some one-off costs, which were incurred during the year. The net profit was lower by 11% due to the lower interest earnings and exceptional item of cyclone of INR 46 million. Excluding the one-off cost and the cyclone restoration costs, the EBITDA would have been lower by 1%, and the net profit would have been lower by 3%.

Financial performance of the company, we believe, was satisfactory, considering the challenges faced during the year on the global supply chain disruptions and the Cyclone Tauktae, which Jakob also touched in his opening remarks.

We also like to inform all our investors that the Board of Directors have approved a final dividend of INR 2.4 per share for financial year '21, '22. This, of course, subject to approval of shareholders in the AGM. With this, the total dividend paid for financial year '21, '22 is INR 4 per share.

With this update, we complete our financial overview, and we are happy to take questions now. Thank you.

[Operator]

Thank you, sir. Mohit, you may go ahead with your question.

[Mohit Kumar, analyst]

Congratulations on good set of numbers, given the very, very challenging macro environment. My first question is on the cargo outlook for FY '23. If we look at the last 3, 4 years, your Container contribution has declined; now bulk has been doing well. And we added 2 lines, I think if I remember correctly, in Q1 FY '22 for the Containers. How do you see FY '23 panning out? Can we see material growth given that DHS is also now operational?

[Jakob Sorensen, executive]

What I'm very happy about is that we have not lost a single customer on the shipping line front. And as you say, we've added, in fact, 2 services, including COSCO, a very large mainline operator. The problem that the entire market is facing is still a shortage of tonnage. So even with the regular services, we have seen redeployment of some of the vessels from our services to other areas and other market.

But we are seeing a gradual return of container volumes, and we had, in fact, had a year -- sorry, a month-on-month growth of 2%, 3% for the entire calendar year of 2022, and even May here also looks like it's continuing that trend. And I think I would like to interpret that to be showing that we have bottomed out and the market is slowly recovering. You still see higher freight rates, and I don't think that you will see a crash in freight rates, but you will see the global markets stabilize at a more reasonable level. And you will also see that more capacity is coming back to the market as congestion is easing up and new buildings are coming in.

And in fact, ironically, but we also see that the war in Ukraine is giving some medium-sized container vessels from the Baltic Sea and the Black Sea, which probably will be deployed in India to Middle East and India, Far-East trades, among others.

So in short, I think we can say that we are optimistic with the container outlook for this year. And you're right to point out that on the land side, the DFC is now up and running, and we've had tremendous success in running trains at less than 24 hours from Pipavav to the Northwest markets. And so the intermodal and the DFC is definitely helping us to have a very strong value proposition, and it's kind of compensating for the little bit more unstable ocean market that we have very reliable rail service as well as very fast transit times. So I hope that answers your question.

[Mohit Kumar, analyst]

Yes, broadly. Sir, my second question is on the Bulk contribution. The Bulk contribution has risen very sharply in FY '22. And I think the number is closer to now 5 million to 6 million tonnes. How do you see this panning out in FY '23? Is there something one-off? Or do you think it will decline or it can sustain at these levels? And can you give us a breakup of the bulk?

[Jakob Sorensen, executive]

Yes. So I think it's still performing strong. But as you also know, we will soon enter the monsoon season, and that has a natural damp on some of the commodities. Santosh has the breakdown in between fertilizers and so on. But as I said in my opening remarks, we've been strong on LPG, and we are in the midst now of the upgradation of the liquid berth so that we can handle very large gas carriers, VLGC, that I'm pushing the engineers so that we can finish that by August.

And that means that you will see the Liquid cargo continue to be strong, and that is less sensitive to the weather.

Cargo, like fertilizer is more seasonal. We had very strong volumes at the moment. All our warehouses are full with fertilizer, and we anticipate a dip in that volume in the coming months.

And then you have some of the minerals and coal, which is outdoor and it may be affected both by prices in the market, but certainly also by weather distortion. So while we think Bulk will continue to be strong, we do see that there will come a dip in the coming months on the Bulk. But as you're rightfully pointing out, we are doing overall very strongly, 5 million tonnes of bulk cargo, which is more or less our nominated capacity in the port.

And we are looking at that as an opportunity to see if we can find ways to increase our capabilities in the Bulk areas.

[Santosh Breed, executive]

And just to add, we also continue our efforts to add new commodities. So we are looking at agri commodities as well on bulk. And we also added wood pulp. So we handled wood pulp in this quarter. So that effort is continuous. So we'll really focus on maintaining this run rate for bulk.

[Mohit Kumar, analyst]

So can you give us the breakup of the Bulk for the quarter?

[Santosh Breed, executive]

Sure. So overall, coal was 156,000 metric tons, fertilizer was 431,000 metric tons and minerals were around 872,000 metric tons.

[Operator]

Deepak, you may go ahead with your question.

[Deepak Maurya, analyst]

First and foremost, if you could address the update on the concession renewal. I mean, we have been nearing the end of the concession, I believe, and what is the status over there. In the previous calls, you did mention that talks are progressing. But is there any new information which you would like to share at this stage?

Secondly, if you could help us understand the export-import container volume trajectory. How has it been in the previous quarter? And then at the same time, what are you seeing in the current quarter to date?

And then finally, if you could help us understand the unit economics of Liquid Bulk versus Dry Bulk versus Container. I understand that Dry Bulk has lower margins and Container has the highest margins, but where does the new commodity which you're handling? And then you stressed about it that it is a good driver going forward. So just if you could provide some color over there.

[Jakob Sorensen, executive]

Yes. On the concession, we continue to have a good dialogue with GMB on that. As you may also have seen in the press, GMB has appointed AT Kearney to make a legal review and to clarify the legal landscape and rules, regulations and laws as well as suggest a scheme for which GMB can proceed with a rollover after concession. I know also AT Kearney has looked at how this is handled internationally. And where we are in that process is that as far as we understand, AT Kearney has delivered their recommendations to GMB, and now the Gujarat government is looking at those recommendations, and they're having an internal process in terms of finalizing what they're going to do.

The million dollar question is probably whether we will see any significant movement in this process on this side of the elections or whether we have to wait until the local elections in Gujarat are done in December, and that means it will go into beginning of 2023. So we are trying to find more information on that. But as I said, a good and continuous constructive dialogue with the parties involved on the concession extension. And let me just remind you that it runs until 2028.

Second question you had was about the EXIM volumes of Container. And as I said before, we've had month-on-month a 2%, 3% strengthening of the volumes. And I believe we continue to see a recovery in the market for containers. On top of that, we have a little bit of windfall, thanks to the unfortunate situation in Colombo and Sri Lanka. We've seen more transshipment cargo coming into Pipavav from various shipping lines.

And then we've also had a number of ad hoc extra calls in the spring year, which we are quite hopeful could continue as well. So I think the container volumes will continue to be strong and recover. And as I said, we've already seen 2%, 3% months-on-months improvements there.

Then you asked about the spreads on the margins in the Bulk segment. Let me start by saying it's clear to us that we are primarily in Containers, and Containers are also having the best yield to us. The dry bulk is of less yield, and there's a lot more variable cost in terms of labor. So that's a little bit parallel revenue and cost lines there when it comes to fertilizer and minerals and so on because it's quite labor intensive and the yields are lower.

But a very attractive segment in the Bulk is the liquid LPG, which we are now making an effort to grow in with the upgrade of the [indiscernible] to VLGC, and we have further expansion plans in LPG going forward. And as I mentioned earlier, we have the capability to evacuate LPG by rail. It's quite unique, and it's extremely efficient and the NOCs like it. We can also evacuate by road tankers, and then now we have confirmation that there is a pipeline that will be started. It's called the Kandla-Gorakhpur pipeline and that is also confirmed will be linked with Pipavav. So we are having some good outlook for the LPG volumes.

[Operator]

Vaibhav, you may go ahead with your question.

[Ashish Shah, analyst]

This is Ashish from Centrum. Just 1 question. You mentioned about the Containers being the highest profit margin business. But what we've actually seen during this quarter is with a higher volume of minerals and generally Bulk, we have actually done better margins on a per metric ton basis. So was anything extraordinary in terms of the Bulk mix or any revenue item which we should be noting, which has led to this higher margin despite the bulk volume has been higher?

[Santosh Breed, executive]

So Ashish, just to answer that question. One, there is nothing one-off which we can see in the margins. The mix of the cargo, because when you look at our mix between the bulk cargoes itself, between the coal, fertilizer and minerals, then minerals, of course, gives a bit better margin than fertilizer. So those kind of mix always have some impact on the EBITDA.

Second, as I mentioned in my opening remarks as well, when you look at container realizations, container realizations also have gone up mainly because of the tariff increase, what we have taken and also because of the favorable cargo mix. Because when we look at the quarter-on-quarter comparison, then the overall -- the mix of cargo between EXIM and coastal has changed. And this also helps on an overall basis to improve our margins. So these are the few reasons why you see a change in the margins.

[Jakob Sorensen, executive]

Well, I think also the ratio between 20-foot containers and 40-foot containers, which we see gravitating towards more 40-foot containers means that we have a slightly better yield on the container business as well. But as Santosh said, it's primarily also because we have a majority of EXIM business there.

[Ashish Shah, analyst]

Sure. Santosh, since you mentioned on the Container tariff increase, could you mention what is the amount of increase that we would have seen in the Q4 because of the Container tariff increase?

[Santosh Breed, executive]

So it's in the range of around 4%, Ashish. So that's the tariff increase what we are seeing.

[Jakob Sorensen, executive]

We continue to implement that increase across the Board. And we have here, for example, from first of May, another major customer that has accepted a 6% increase on their agreement. So while we can announce a general tariff increase, there is always a negotiation in terms of implementation practically and applying that to long-term contracts.

But obviously, we see also with some strong arguments to compensate for rising inflation and cost and so on. And while I wouldn't say that -- it's not something that just happens one day morning, but it's certainly something that our customers have a certain understanding for, and we are getting this implemented slowly but surely across the customer portfolio.

[Ashish Shah, analyst]

Sure. Just one last one from my side. On the minerals side, obviously, a lot of volume could be driven by the nearby UltraTech plant and the fact that the jetty has been under major repairs. So in that context, if you can just give some idea on how much of this can be continuing with the Pipavav Port? And how much could possibly go back once that jetty is available to UltraTech? That's all from my side.

[Jakob Sorensen, executive]

Yes. That's a good question because we do not like to comment on specific customers. But I would say that we have had a tremendous cooperation with UltraTech and to mutual benefits. Obviously, they were really in dire straits after the cyclone with significant damage to their infrastructure. So we -- but we recovered faster, and we've been able to help them out in maintaining their business.

So what we did, at some point in time, we were both importing coal and limestone and materials for their manufacturing, and we were exporting the finished products of cement from our jetty. As you rightfully say, they have now completed some of the civil works and repairs, and they have gained back the export of finished cement from their own jetty. While -- during this crisis, we have actually found some mutual efficiencies as well. So I think we will continue to take coal and minerals via GPPL to the extent possible, which is also actually having a benefit for them. So maybe I can wrap this up by saying that we expect only a minor impact for us during 2022. And then perhaps next year, they will be in a better condition to take over more of what they originally had. But as I also said, we've actually been able to identify mutual benefits in this process. And some of these, I think, will actually be retained. So we will maybe have a different pattern going forward in our business relationship with UltraTech.

[Operator]

Nikhil, you may go ahead.

[Unknown Analyst]

Sir, you mentioned about the tariff hike for the Container segment. Can you also give us any flavor as to how much tariff hike you have taken for the Bulk segment? And that will be my first question.

[Santosh Breed, executive]

So for Bulk, most of our contracts with Bulk are on actually special contracts. We don't have a specific tariff for handling charges. We do have only for Marine. And then, of course, Marine, tariff is across both Containers as well as Bulk. So that increase is there. But otherwise bulk handling is purely on a contract-to-contract basis.

[Jakob Sorensen, executive]

I would add to add that, of course, the bulk commodity value is lower, and it's very much sensitive to the overall cost of doing the business. But we have been quite successful in efficiency in terms of handling ships within a couple of days, and that means that there has been mutual savings on the cost of the vessel with detention and demurrage charges, both for the cargo owners as well as for the ports, which has been mutual benefit that's shared. I think that's also part of our success that we attract customers with the Bulk business because we have a very good track record on the efficiency of the cargo handling.

[Unknown Analyst]

Sure, sir. Again, I've got one more question. For -- so I just wanted to ask you, we've got about 40% stake in PRCL. And what is the exact reason for the low profitability of the business? And do you -- where do you see it go in the next 2, 3 years?

[Jakob Sorensen, executive]

So PRCL is, of course, a joint venture that we have with the railways. And if you're looking at the last quarter, there has been a couple of items on the P&L which has been a little bit unusual, but we do see that going forward and not least with the DFC and so forth that there's some good opportunities in PRCL.

I think the cost of the electrification of the railway line has, of course, been there, and there's also an additional cost of manpower for maintaining the same. But at the same time, there will be some efficiencies in terms of the electricity versus diesel. And that, I think, is not enough to just look at in one quarter P&L.

Santosh, I don't know if you want to add something?

[Santosh Breed, executive]

No, you're absolutely right, Jakob. So this arrangement between railways and PRCL on sharing of this benefit from the electrification is still work in progress. So we are not seeing the benefit -- the entire benefit coming in yet, whereas the cost has started kicking in. That's one of the key reasons why we see this disparity on the profit number. However, when we look forward, then we are quite hopeful of some improved results for 2 reasons: one, of course, we get the recoveries also the past quarters, and PRCL also has started [indiscernible] operations. So this is a new business stream which they have introduced and that will be eventually scaled up, which will help them to increase the top line as well as the profit.

[Unknown Analyst]

Sir, just one follow-up question. The profit -- PRCL had made around INR 80 crores in profit in FY '20. So what exactly can be the reason for the fall in the profit?

[Santosh Breed, executive]

As I mentioned earlier, this is mainly because of the electrification project which has been implemented, and the cost of maintaining that infrastructure has started kicking in. So there is a cost allocation coming from railways for that maintenance. So that has started kicking in. But the savings from the electric movement of trains is yet to be agreed and calculated. So we are not seeing a full impact of that recovery. So that benefit will come in subsequent quarters and we can see those there. And of course, that will help to push the profit up.

[Unknown Analyst]

Sure, sir. A final question, if you may allow? Can you give us a realization breakup for Container, Bulk, and Liquid cargoes?

[Santosh Breed, executive]

Sure. For Container, per TEU realization is in the range of 6,900 to 7,200. As I mentioned, this is an improvement as compared to the earlier quarters, mainly coming from tariff increase, being roughly in the range of around 4%. And then there's an additional benefit what we got in this quarter of around 1% because of the exchange rate.

For Bulk, we continue to maintain a realization of around 450 to 550, depending on the cargo mix. And for Liquid, it's in the range of 675 to 700. Again, it varies based on the cargo mix of the various Liquid that we handle.

[Operator]

Achal, you may go ahead with your question.

[Achal Lohade, analyst]

My first question was -- sorry, I joined the call a little late. If you could clarify what has been the EXIM growth for the quarter and for the full year for our Container business?

[Santosh Breed, executive]

So overall, as we mentioned -- overall, of course, there is a drop in the container volume, but the drop is mainly because of the coastal volumes. And as far as EXIM is concerned, then there is a lower drop. So on current quarter as compared to the same quarter last year, then the EXIM volumes had dropped by around 5%. Hello?

[Achal Lohade, analyst]

For FY '22, how much would the decline be?

[Santosh Breed, executive]

That will be in the range of around 7% year-on-year for EXIM volumes.

[Achal Lohade, analyst]

For EXIM.

[Jakob Sorensen, executive]

If you joined late, you might not have heard that I said that the direct impact on the Cyclone Tauktae, we estimate to be around 60,000 TEUs, and that corresponds to some 9%, 10% of our Container volumes, right? And that is the direct impact, which we faced on the 17th of May 2021, whereas that has had no impact on other ports in Gujarat, since it was a landfall of that cyclone just very close to Pipavav. So that's a one-off that has an impact on the year on the total volume.

[Achal Lohade, analyst]

Got it. Got it. That's very helpful. Thanks for the clarification, sir. Is it possible to get some color in terms of what is the operating cost, which is part of your operating expenses for dry bulk and the liquid?

[Santosh Breed, executive]

So of course, we don't really split it by each business segment. But in the current quarter, if you see the increase, that is mainly driven by the higher bulk handling expenses.

[Jakob Sorensen, executive]

Yes. So the bulk handling is more manual. And therefore, you have a linear parallel between revenues and costs on the Bulk, on the Dry Bulk, whereas by nature the liquid bulk is through pipelines and there's less direct operating expenses linked to handling that sort of cargo.

[Achal Lohade, analyst]

Right. Is it fair to say like Dry Bulk, I'm just throwing some numbers, would be about INR 140, INR 145 per tonne kind for minerals or coal?

[Santosh Breed, executive]

Sorry, we are not able to really comment on that because we don't do any segment reporting.

[Jakob Sorensen, executive]

But I would still say, as I also said, as a general comment that we have been operating quite efficiently. So if you imagine a vessel coming in and have allocated 3 days for discharge, and we managed to do that in 2 days, there's a benefit there mutually between the cargo owner, the port and the vessel. And that time saving is also worthwhile something for customers.

[Achal Lohade, analyst]

And just one more comment. I don't know if it's already clarified. In terms of the outlook, you did mention that you have seen some benefit in this quarter pertaining to the issues at Colombo. So is that the issue of the skipped calls behind us now? Are we on a steady state? And what kind of growth can we look at for the next, say, couple of years in terms of the EXIM growth?

[Jakob Sorensen, executive]

Yes. Actually, what we can say year-to-date, January, it's now April and including May, is that there's a nice steady growth month-on-month on the overall container volumes. The skip calls are still taking place, but to a lesser degree. And as we see more tonnage coming to the market, we are hopeful now that we are talking outlook, right, we're hopeful that skip calls are eventually going to be down to 0.

And contrary to that, we are seeing now additional ad hoc calls plus we have added now for the rest of the year 1 service from Maersk Line, which is directly as a consequence of the transshipments in Colombo. We are now seeing that coming to Pipavav. So I think we should be cautiously optimistic that container volumes continue to improve month by month over this calendar year and that we eventually reach back to pre-COVID levels.

[Santosh Breed, executive]

And just to add, Jakob, so if you refer to the presentation, which is there already on the website, you'll notice that the overall Container volumes are gradually recovering. Of course, this is not a steep recovery, but if you see the quarter-on-quarter movement, then there's a gradual recovery of volumes.

And the good development we have seen in our ICD volumes are growing strong. So that's a very good indication for us because that's my key market and that also sees a good recovery. If you look at our liquid volumes, then there has been a consistent volume of 200,000 metric ton, which has been delivered. And that's the run rate which we've always been targeting to deliver a 1 million metric ton on an annual basis.

And we also look forward now with the jetty ready to handle VLGCs. This will help us to further increase this volume as well. Bulk, as we have mentioned also earlier, has been strong. We are focusing on adding new commodities to maintain this run rate, but this is certainly a seasonal, and there can be some variation in the coming quarters.

But the aim is to also to add new commodities and see how we can maintain this run rate. So that's the overall outlook on the 3 main business streams that we are operating in.

RoRo, as I mentioned earlier, again, will continue the existing run rate. We are still working with our customers to see how we can participate more on exporting cars from our port.

[Achal Lohade, analyst]

Great. This is very helpful. Just a clarification on the tariff hike. When was the last tariff hike? And the 6% tariff hike is -- has already been implemented from 1st of May?

[Jakob Sorensen, executive]

I think I mentioned that earlier that we are discussing the specific implementation of that on a contract-to-contract basis, but we do have some full understanding from our customers in terms of our need also to compensate for higher inflation, et cetera. So the tariff increase on containers is being discussed with the various shipping lines. We have another big mainline operator who has accepted as of 1st of May. So I think we will basically expect to have 100% across-the-board implementation in a month or 2. So it will probably have full effect for half year, or 9 months of your calendar year.

[Santosh Breed, executive]

Yes. And as I mentioned earlier, we've already taken a hike in February, and we have some impact of that already in the quarterly result, right around 4%.

[Achal Lohade, analyst]

And the 6% is in addition to that, right? Sorry, I'm interrupting. The 6% is in...

[Santosh Breed, executive]

Yes. So basic tariff hike has been implemented. But now we are working with our customers to start taking that tariff hike. So there's certain customers which are already on board and few are coming on board as you move along in April and May.

[Jakob Sorensen, executive]

So it's individual from a contract to contract when the tariff hike will take the practical effect. That's a little bit of a...

[Achal Lohade, analyst]

No, I got it. Where the confusion was, this 6% is in addition to Feb or if this includes the Feb part of it, which is being discussed and being effected fully.

[Santosh Breed, executive]

This will be additional for those customers who have not taken tariff hike in February. So as per tariff hike was concerned, we have published the revised tariff in February. It was implemented for most of the customers, and there are some contracts which are coming now and taking this hike in the subsequent months. So there is no revised tariff hike which has been introduced in the month of May. It's the same tariff hike, but it goes by customer to customer. So start [ date ] will differ from customer to customer.

[Operator]

Harminder, you can go ahead with the question.

[Unknown Analyst]

What is the impact of the China lockdowns on our core? And what proportion of the container movement, say, both imports and exports put together comes from China?

[Jakob Sorensen, executive]

I don't think we can say that there is a direct impact on a specific service. But China -- the China lockdown has a knock-on effect to the market. Despite of that, it does seem that we do see a slow but steady recovery in the container volumes. But we've also seen that we are diversifying to other markets such as the Middle East. We had a new service to the Middle East, NMG, that has started to take effect, it's quite successful now. So I'm not saying that China lockdown does not have overall market effect for the Container shipping. But as Pipavav Port, we are maybe less exposed specifically to that lockdown.

[Unknown Analyst]

Okay. To put it another way, what would be the geographical mix of, say, country of origin or destination, say, from China or Southeast Asia and Middle East for the Pipavav Port?

[Jakob Sorensen, executive]

I think we have a very healthy spread in that both import and export, not only Asia, as you say, China -- and Asia is not only China, but we also have Southeast Asia, we see a strong expansion in the Middle East market. And then of course, let's not forget both Pacific and Europe. So I think we are very much hedged overall on the geographic spread.

And therefore, as I said, also a lesser impact from the China lockdown. China is a difficult topic. I think we could have a long conference call on China because you also have geopolitical influences and other things that are happening with China. But I think India is actually less exposed than others for the China lockdown.

[Unknown Analyst]

Sure. What proportion of our top line is in USD terms?

[Santosh Breed, executive]

Yes. So the container business is entire USD, which is roughly around 70%.

[Unknown Analyst]

Okay. Okay. So the remaining would be Bulk and Liquid, which is not USD.

[Santosh Breed, executive]

Yes. That's right.

[Unknown Analyst]

Okay. Okay And one final question. Can you split the Container volumes by, say, EXIM and coastal for FY '22?

[Santosh Breed, executive]

No, no. We don't really split that by each type EXIM and coastal, but we have given a guidance that overall on the percentage basis on the variation on a quarter-on-quarter basis, but we are unable to give any further split on this.

[Unknown Analyst]

Okay. And one final question. I think we have had -- yes, go ahead, sir. Yes.

[Jakob Sorensen, executive]

Yes. I think we just have made one remark on the call. We've seen some of the coastal operators are actually gravitating towards EXIM business as well. Shipping Corporation of India has been supporting Indian shippers by going EXIM as well. So that might give you an indication of -- to answer your question.

[Unknown Analyst]

Yes. Understood. Understood. Yes, one final question. What would be the incremental, say, Container volumes from the recently added services?

[Jakob Sorensen, executive]

I think, as I said, we are seeing a 2%, 3% growth on a month-to-month basis, and that's nice and steady, as well as good decline in the skip calls, which has been our pain points in the past. So I think we will see the same trend, as Santosh also say, not a hockey stick, but a strong steady growth of the Container volumes on a month-to-month basis.

[Unknown Analyst]

Actually, the question was different, but I will take it off line.

[Jakob Sorensen, executive]

The question was different?

[Unknown Analyst]

Yes. No, I was trying to understand what is the contribution that would come in from the recent service additions?

[Jakob Sorensen, executive]

Okay, okay. Yes, okay. And I think it's difficult to make a specific split up on that because yes, we have added some services and they are compensating for some of the skip calls and so on. So how that interaction is, is very difficult.

You want to add something, Santosh?

[Santosh Breed, executive]

So I think -- I what you said right. So of course, the new service, which was added for the Middle East is doing extremely well. We have seen lot of support coming from [indiscernible] and in customers. But at this point of time we will have to wait maybe for another quarter to really give guidance on what volumes this will add, so we'll like to wait for another 1 quarter for giving you a number on this.

Apart from that, as we mentioned earlier, there are transshipment volumes that we are expecting now because of the disruption in Colombo. So that will certainly add more volumes to Pipavav. And that -- this is also an early stage because we have started seeing this movement in this quarter, but this will get ramped up slowly. And we will also have some better visibility of this in the coming quarters. So give us 1 quarter and we'll give some guidance on that in the coming quarter.

[Jakob Sorensen, executive]

Yes. And I would say on top of that, we've had so far 3 ad-hoc calls. So again, we cannot say that they are regular new business gain, but more like ad hoc. So you can say that they have the opposite effect of a skip call. But I think my point here is that the predictability is a little bit hard to do on both skip calls and ad-hoc calls on contrary to a regular situation. But of course, it's an upside to us that we've taken, but it's hard to predict.

[Santosh Breed, executive]

Yes. And just to clarify, I think more [ clarity on ] this. So one, as we mentioned, we have added services. So NMG is there for the Middle East. We have the transshipment coming in now. And what Jakob was mentioning that we also continue to go to the market if we can take some additional calls, which are not regular calls, but we can still handle some additional calls and we have got some traction on that because we have seen some ad hoc calls coming at Pipavav. So this volume will be over and above our regular services. And that actually helped us on 2 count, one, of course, incremental revenue, but it also covers the fixed cost for us and helps the margins.

[Operator]

Manish, you can go ahead with your question.

[Unknown Analyst]

I just wanted to know what would be the EXIM growth for the industry for the Q4 and FY '22? If you could just share that with me.

[Santosh Breed, executive]

For Q4, I think more or less it is flat, so if I had to compare with the same quarter last year. I think there is a marginal increase, it's not a significant increase, on the West Coast of India. And as we are seeing that this increase also is coming from certain terminals which are dedicated to the shipping lines and possibly a lot of transshipment that is happening at those terminals. So our take on this is from EXIM, when we look at, then we are not really seeing a major uptick on the West Coast on a year-on-year basis.

[Unknown Analyst]

Okay. And for the full year?

[Santosh Breed, executive]

Yes, I think full year also is a similar trend what we are seeing. So no major variation between the quarter performance and the full year performance.

[Jakob Sorensen, executive]

I think just to repeat what I said earlier, we are not seeing a hockey stick in recovery, but we are seeing a 2%, 3% month-on-month recovery of Container volumes. But I think it will take time. You mentioned also the China lockdown, but we have the political situation in the Ukraine war. We have a number of impacts that still will affect in the market. But what is the important part here is the availability of tonnage, and that seems to be recovering slowly, but steadily.

[Operator]

Mohit, you can go ahead with your question.

[Mohit Kumar, analyst]

So my questions have been answered.

[Operator]

So since there are no further questions, I'll ask the management to give their concluding remarks.

[Jakob Sorensen, executive]

Yes. So of course, we are quite satisfied with the result of this financial year, not least, because in fact, the entire team has performed a tremendous effort in the recovery and not least in the latter part of the year in the rebuilding of the port following the cyclone.

And I know that most of our listeners and analysts perhaps are much more interested in our crystal ball and looking forward, but I have to again conclude that I'm quite proud of the performance for GPPL for this year, and as again said, on top of COVID, we had that exceptional case of the cyclone, which caused significant damage and where we have spent a lot of efforts and time that we could have done chasing more business. We have done and spent the time on recovery and rebuilding the port.

But I also want to say that everybody is welcome to come and visit us. And you will see that the port is actually standing and looking brand-new following our upgrades. And we have tried to secure ourselves for any future storms that are coming in. And this is a good timing. We have full traction on the benefits of DFC where we continue to be the lead port in that new development of intermodal of Indian logistics.

And then I think we do see that the international Container market are slowly, but gradually recovering. And here, I think the terms that we've used is that it's not a hockey stick, but it's a steady month-on-month recovery of the Container volumes. And then you have all noticed that we had a fantastic year in terms of Bulk. And I think we should just all be happy about that.

So thank you for all your interest.

[Operator]

I believe Achal has one small question.

[Jakob Sorensen, executive]

Yes, of course. Please, go ahead.

[Achal Lohade, analyst]

That got answered.

[Jakob Sorensen, executive]

Right. Then we wish you all a good day, and thank you very much for your interest. Thank you.

[Santosh Breed, executive]

Thanks, everyone.