Profits of Adani Enterprises – the company in Adani Group’s complex structure that owns the proposed Carmichael coalmine – have collapsed almost 50% year-on-year, according to a half-yearly report released this week which does not mention the mine.

The results further show the company is in financial distress, according to Tim Buckley from the Institute of Energy Economics and Financial Analysis, who says they also reveal the company can’t walk away from the unviable Carmichael project without descending further into financial distress.

The Carmichael coalmine, which would be the largest ever built in Australia, has struggled to find financing for either the mine itself or the associated infrastructure such as the rail line that would transport coal to an export terminal on the Great Barrier Reef.



Every major Australian bank has said it will not be involved in the project, and the company has been seeking subsidised government finance from the Australian government and possibly also from China.

“If they tried to exit the project now, they would either have to write it off or find someone willing to buy it,” said Buckley.

If the project was written off or sold for significantly less than its current book value of US$1.15bn, the company would find it increasingly hard to finance its many other projects around the region, said Buckley.

Currently, the Adani Enterprises Limited – which is the only publicly listed company in the Adani Group – has a book value of just under US$2.3bn. Meanwhile, its latest report shows its debt has risen by almost US$400m to US$3.83bn.

Buckley said if Carmichael were written off or sold for very little, that would remove US$1.15bn from the company’s book value, leaving it with debt worth more than three times the value of the company itself.

And without the Carmichael mine, the Abbot point coal terminal’s viability would be threatened, leaving an even bigger hole in the group’s finances, other work by Buckley has suggested.

Buckley said the Carmichael mine isn’t specifically discussed in the half-yearly report, despite the project representing about half the company’s value.

“It is very telling to us that the 16-page interim report makes absolutely no mention of Carmichael coal proposal, notwithstanding the Australian Adani Mining Pty Ltd management repeatedly claiming the group is just four months from reaching financial close of a much delayed, multi-billion dollar investment program,” Buckley wrote in a briefing note.

He said the omission may simply be a way of the company avoiding advertising something that is “embarrassing and financially costly”.

Meanwhile, the company reported remarkable achievements in its renewable energy business in India. Within three years, it has built the nation’s second-largest renewable energy business, Buckley said.

In a statement released with the results, Gautam Adani, chair of the Adani Group, said they were confident the business would bring “significant benefits to the Indian economy and the stakeholders”.

“Adani Enterprises continues to consolidate its position as energy and infrastructure player,” he said. “With favourable policy measures, we remains committed to create assets of national importance.”

Rajiv Nayar, the CFO of Adani Group said: “Our renewable, coal, city gas and agro businesses have delivered broad-based, durable and profitable growth through improved operational performance.”