Shortage of gas supply to its power projects saw GVK Power and Infrastructure?s consolidated net loss widening to R171.01 crore during the January-March quarter. The company had reported a loss of R20.86 crore during the same period last year. Though analysts had expected the company to post losses, it was worse than their expectations of a loss of around R27 crore.
For the year, the consolidated net loss stood at R335.97 crore, against a consolidated net profit of R61.48 crore recorded during the previous year.
The company?s revenue fell sharply to R500.07 crore from R657.59 crore in the same quarter last year, as it recorded no revenue from its three gas-based projects ? 464 MW GVK Gautami Power and 235 MW Phase I & 220 MW Phase II projects of GVK Industries ? due to decline in gas supply from the Krishna Godaveri basin in Andhra Pradesh.
Gas-based power plants in India have been hit by fuel shortages as production in the KG-D6 basin has fallen sharply in the recent years, which Reliance Industries and BP, the operators in the block, have attributed to a natural decline in the fields. A new pricing regime recommended by a panel led by C Rangarajan, the Prime Minister?s economic adviser, if implemented would sharply increase fuel costs for power producers, which are already reeling from shortages in supply.
GVK Power?s energy business alone recorded a net loss of R171.41 crore for the quarter ended March, compared with a R19.20 crore loss in the same quarter last year.
GVK Power also faced higher costs in the quarter. Total costs for the fourth quarter rose nearly 13% to R614.10 crore while the company?s tax expense nearly trebled to R40.87 crore from R14.54 crore in the year-ago quarter.
The company?s airports business, however, fared better in the quarter, with net profit at GVK?s Mumbai International Airport arm rising to R55.73 crore from R32.96 crore last year. GVK?s Bangalore International Airport recorded revenue of R155.60 crore for the quarter ended March, versus R156.59 crore last year. BIAL?s net profit for the quarter rose to R58.78 crore from R37.52 crore last year. The company?s stock, which has shed nearly a third of its value since the start of the year, shrugged off the weak results to close up 1% at R9.39 on Wednesday.
GVK Power has invested in Australia?s Galilee basin, where it aims to tap into the region?s rich coal reserves. During the quarter, a subsidiary of the company, GVK Hancock, tied up with Aurizon, Australia?s largest rail freight company, to further develop rail and port infrastructure.