Half-year Results
H1 2025 revenues fell 7% and operating loss widened amid ongoing debt refinancing negotiations with lenders.
- Revenue down approximately 7% year-on-year
- Operating profit at Indian level down about 80%
- Consolidated operating loss before depreciation and impairment £6.3 million
- Advances write-off £6 million
- Impairment charge £6.9 million
- Cash and cash equivalents £480k (prior £911k at 31 Dec 2024)
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Mercantile Ports & Logistics Limited (AIM: MPL), which is operating a port and logistics facility in Navi Mumbai, Maharashtra, India announces its interim results for the period ended 30 June 2025.
Management Statement:
As previously announced, the Company's performance during the period was impacted by the Company's ongoing negotiations with its lenders, given that the Company has been engaged for nearly two years with its banks to refinance the debt held by its Indian lenders. In May 2025 the company made a one-time settlement offer ("OTS") offer to lenders to settle the debt at GBP 43mn. The lenders ran a process for price discovery, wherein they received a bid from the third party to settle the debt at GBP 46.5mn. In exercising its right of first refusal, the company offered a settlement amount of GBP 47.1 million and was subsequently declared as the successful bidder by the consortium. Between June and July 2025, sanctioning authorities of two of the three lenders approved the OTS proposal for the Company's term debt, with approval from the third lender pending. In September 2025, the Company was informed that the OTS had been annulled, as the third lender's approval had not been received. It was further understood that an arbitrary bid had been received by the lenders which offered to settle the debt at GBP 52 million.
The Company maintains that it has met all of its obligations under the agreed terms and has taken steps to safeguard its position. Legal proceedings have been initiated before the High Court of Delhi, where interim protection has been granted. The Company is represented in these proceedings by senior legal counsel, including a former Attorney General of India.
Through the continued support of its shareholders and the sustained efforts of the Company, a strategically important and valuable port and logistics asset has been developed. However, business operations on the ground have been constrained by the uncertainty and the time taken to conclude the debt settlement process.
The Board remains fully committed to safeguarding the Company's core asset and protecting the interests of all stakeholders.
At present, the court is due to deliver its interim ruling on 6 October 2025. Should the ruling be adverse to MPL, the Company will have the opportunity to appeal against the verdict as per legal advice. The Board will continue to act in the best interests of the Company and will keep shareholders informed of material developments.
The Board firmly believes that there is significant inherent value in MPL's listing on the London Stock Exchange. The Board is determined to ensure that MPL remains a going concern and that this value is preserved.
The original purpose of MPL's listing in London was to provide a platform to invest in and develop niche infrastructure and logistics assets across India and internationally. That strategic objective remains unchanged. The Board's priority is to safeguard the existing asset base and to position the Company to deliver on its long-term strategy once the current challenges are resolved.
Trading and Financial update:
The protracted resolution of lender-related matters has weighed heavily on business operations and profitability. For 1H 2025, revenues fell by approximately 7% year-on-year, while operating profit at Indian level declined by about 80%, largely due to higher legal and administrative costs associated with the debt negotiations. 1H 2025 consolidated operating loss before depreciation and impairment loss amounted to GBP 6.3 million primarily as a result of advances write off.
The uncertainty has also presented challenges in sustaining confidence among customers, suppliers, and employees. This environment has led to delays in signing of new customer contracts until greater clarity emerges on the company's financial position.
One-Time Items
Beyond operating performance, financial results were affected by specific one-time charges, including:
- A write-off of approx. GBP 6 million in advances provided in FY2019/20 to an EPC contractor for quarry booking and development. The contractor subsequently entered liquidation, with the order finalized by the court in 2025.
- A GBP 6.9 million impairment following a review of actual results versus budgeted revenues and profitability.
It is important to note that, given the current debt situation, the Company reclassified borrowings to current liabilities and has prudently refrained from any new capital expenditure in 2025, focusing instead on stabilizing operations and safeguarding resources.
Outlook
As and when the position with the Company's lenders is resolved, the Board remains confident in the prospects of its facility and the Board looks forward to updating investors in due course.
| Basic and diluted, for the period attributable to ordinary equity holders | ( £ 0.050p) | ( £ 0.017p) | ( £ 0.052p) |
| FOR THE PERIOD ENDED 30 JUNE 2025 | |||
| CONSOLIDATED STATEMENT OF FINANCIAL POSITION | |||
| AS AT 30 JUNE 2025 | |||
| Period ended 30 June 2025 Unaudited | Period ended 30 June 2024 Unaudited | Year ended 31 Dec 2024 Audited | |
| £000 | £000 | £000 | |
| Assets | |||
| Property, plant and equipment | 85,236 | 104,553 | 93,543 |
| Intangible asset | 4 | 49 | 33 |
| Non-current tax assets | - | - | - |
| Total non-current assets | 85,240 | 104,602 | 93,576 |
| Inventory of traded goods | 26 | - | 323 |
| Current tax assets | 299 | 2,995 | 2,879 |
| Trade and other receivables | 5,801 | 15,953 | 13,296 |
| Investments | 171 | 179 | 180 |
| Cash and cash equivalents | 480 | 937 | 911 |
| Total current assets | 6,777 | 20,065 | 17,589 |
| Total assets | 92,017 | 124,667 | 111,165 |
| Liabilities | |||
| Non-current | |||
| Employee benefit obligations | 37 | 24 | 42 |
| Borrowings | - | 35,320 | 28,461 |
| Lease liabilities payables | 1,235 | 1,242 | 1,206 |
| Non-current liabilities | 1,272 | 36,586 | 29,709 |
| Current | |||
| Employee benefit obligations | 54 | 128 | 259 |
| Borrowings | 48,415 | 15,531 | 22,037 |
| Current tax liabilities | 47 | 26 | 17 |
| Leases Liabilities payable | 473 | 533 | 590 |
| Trade and other payables | 2,955 | 3,546 | 4,048 |
| Current liabilities | 51,944 | 19,763 | 26,951 |
| Total liabilities | 53,216 | 56,349 | 56,660 |
| Net assets | 38,801 | 68,318 | 54,505 |
| Equity | |||
| Share capital and share premium | 152,354 | 152,354 | 152,354 |
| Retained earnings | (83,770) | (53,226) | (65,846) |
| Translation reserve | (29,650) | (30,736) | (31,093) |
| Equity attributable to owners of parent | 38,934 | 68,392 | 54,605 |
| Non-controlling interest | (133) | (74) | (100) |
| Total equity and liabilities | 38,801 | 68,318 | 54,505 |
| CONDENSED STATEMENT OF CASH FLOWS | |||
| FOR THE PERIOD ENDED 30 JUNE 2025 | |||
| 6 months ended 30 June 2025 Unaudited | 6 months ended 30 June 2024 Unaudited | Year ended 31 Dec 2024 Audited | |
| £000 | £000 | £000 | |
| CASH FLOWS FROM OPERATING ACTIVITIES | |||
| Loss before tax for the period / year | (17,958) | (6,021) | (18,667) |
| Non cash flow adjustments | 12,358 | 5,831 | 18,664 |
| Net cash generated/(used in) operating activities | (5,600) | (190) | (3) |
| Net changes in working capital | 5,205 | 25 | 1,116 |
| Taxes paid | -- | (869) | (765) |
| Net cash from operating activities | (395) | (1,034) | 348 |
| CASH FLOWS FROM INVESTING ACTIVITIES | |||
| Purchase of property, plant and equipment | - | (870) | 518 |
| Sale proceeds of property, plant and equipment | 8 | 4 | 25 |
| Finance income | 7 | 14 | 34 |
| Net cash generated/(used in) investing activities | 15 | (852) | 577 |
| CASH FLOWS FROM FINANCING ACTIVITIES | |||
| Subscription money received (from the previous fund raise) | - | - | 290 |
| Repayment of bank borrowing principal | - | - | (3094) |
| Interest paid on borrowing | - | (2) | - |
| Repayment of leasing liabilities principal (net) | - | (22) | (54) |
| Interest payment on leasing liabilities | - | (16) | (31) |
| Net cash generated / (used in) from financing activities | - | (40) | (2,890) |
| Net change in cash and cash equivalents | (380) | (1,926) | (1,965) |
| Cash and cash equivalents, beginning of the period | 911 | 2,881 | 2,881 |
| Exchange differences on cash and cash equivalents | (51) | (18) | (5) |
| Cash and cash equivalents, end of the period | 480 | 937 | 911 |
Note:
- The adjustments and working capital movements have been combined in the above Statement of Cash Flows.
Consolidated Statement of Changes in Equity
for the PERIOD ended 30 JUNE 2025
| Stated Capital | Translation Reserve | Retained Earnings | Other Components of equity | Non- controlling Interest | Total Equity | |
|---|---|---|---|---|---|---|
| £000 | £000 | £000 | £000 | £000 | £000 | |
| Balance at 1 January 2024 | 152,354 | (31,444) | (47,217) | -- | (62) | 73,631 |
| Issue of share capital | -- | -- | -- | -- | -- | -- |
| Share issue cost | -- | -- | -- | -- | -- | -- |
| Transactions with owners | 152,354 | (31,444) | (47,217) | -- | (19) | 73,631 |
| Loss for the year | -- | -- | (18,630) | -- | (37) | (18,667) |
| Foreign currency translation differences for foreign operations | -- | (459) | -- | -- | (1) | (460) |
| Re-measurement of net defined benefit pension liability | -- | -- | -- | 1 | -- | 1 |
| Re-measurement of net defined benefit pension liability transfer to retained earning | -- | -- | 1 | (1) | -- | -- |
| Total comprehensive income for the year | -- | (459) | (18,629) | -- | (38) | (19,126) |
| Balance at 31 December 2024 | 152,354 | (31,903) | (65,846) | -- | (100) | 54,505 |
| Balance at 1 January 2025 | 152,354 | (31,903) | (65,846) | -- | (100) | 54,505 |
| Loss for the period | -- | -- | (17,924) | -- | (33) | (17,958) |
| Foreign currency translation differences for foreign operations | -- | 2,253 | -- | -- | -- | 2,253 |
| Total comprehensive income for the period | -- | 2,263 | (17,924) | -- | (33) | (15,705) |
| Balance at 30 June 2025 | 152,354 | (29,650) | (83,770) | -- | (133) | 38,801 |
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