Reduced flow of goods impacting Infrastructure India
Infrastructure India updated the market on its largest asset, Distribution Logistics Infrastructure (DLI), in relation to the global Covid-19 coronavirus pandemic on Tuesday.
The AIM-traded firm said that during the first quarter of the calendar year, DLI performed well, with increased revenue and lower quarter-on-quarter costs, and “timely” project completion.
It said construction at Nagpur, including a private freight terminal and additional warehousing, was now complete, with operations at the new facilities ramping up.
Works were progressing at Bangalore and Palwal, with both sites expecting initial operations to begin in the second quarter.
At Chennai, DLI was working through regulatory approvals, and completion of the terminal remained on target for the end of 2020.
The company said the primary market impact of the global pandemic at the moment had been an overall reduction in the flow of export-import goods between India and China, with changes in the flow of goods having an impact on the cycling balance of containers.
Reduced movements of goods and raw materials between China and India had impacted some of DLI's customers' inventories, and thus production and shipping.
“The changes in the balance of movements of goods, as a result of the global pandemic, are resulting in bottlenecks as empty containers need to be repositioned to meet domestic and export shipments,” the board said in its statement.
“In particular, a current lack of available empty containers is having an impact on Indian hinterland exporters.”
Infrastructure India said it expected that the trend would become more evident across the Indian domestic market, which imports raw materials from China, in the near term.
“It is too early for the board to quantify the potential future impacts of the global pandemic.
“Despite the progress at its terminals made during the first quarter, DLI management anticipate ongoing volatility with freight volume and container cycles, given the current and potential future impacts of the global pandemic.
“The company will provide further updates, as appropriate, in due course.”
At 1413 GMT, shares in Infrastructure India were down 15.38% at 1.1p.