Tata Power Company on Monday reported a 126% year-on-year jump in its consolidated net profit at Rs 163.78 crore during the April-June quarter, due to strong performance from the mining and renewable energy business, however falling short of consensus analysts’ estimates of Rs 397 crore. Profits from the renewable energy business, including the Welspun Renewable Energy arm that was acquired in 2016, more than trebled to Rs 109 crore compared with Rs 26 crore a year ago. The renewable capacity of the company during the quarter crossed 2,000 MW while the green portfolio crossed 3,000 MW, the company said. Electricity generation during the quarter was up by 11.53% to 12,405 million units.
Tata Power, which is facing severe financial issues at its 4,000-MW Mundra ultra mega power plant in Gujarat, and has offered to sell 51% equity stake to state discom Gujarat Urja Vikas Nigam at a nominal value of Rs 1, said the company is reviewing and reassessing the recoverability of the carrying amount of its assets at Mundra. “In view of the estimation uncertainties in determining the future cash flows, the assumptions will continue to be monitored on a periodic basis by the management and adjustments will be made if conditions relating to the assumptions indicate that such adjustments are appropriate,” the company said in its limited liability report.
“The impact of options on the financials of the quarter ended June 30 is currently not determinable considering they are still at exploratory stage with various stakeholders,” the report added. The Mundra plant has accumulated losses of Rs 6,457 crore and outstanding loans of around Rs 15,000 crore. In April, the Supreme Court denied compensatory tariffs to the company declining to accept the increase in imported coal price after the Indonesian government linked the price of coal with the market as a force majeure event. The company claims that the apex court decision not allowing compensatory tariff would make the asset unviable to run.
In FY17 the company’s consolidated net cash flow from operating activities decreased from Rs 7,426.01 crore to Rs 6,957.68 crore, primarily due to lower operating profits and increased working capital. As of June-end the consolidated total assets of the company stood at Rs 82,562.89 crore while total liabilities came at Rs 67,279.91 crore. The net worth of the company is positive at Rs 15,282 crore compared with Rs 14,795.56 crore a year ago.
Operating margins in April-June rose 237 basis points to 26.27% on strong operational efficiencies. The cost of power purchased for the distribution business was also lower by 17.51% to Rs 1,895.39 crore helping the company post better numbers in the power segment. Revenues from the power segment, that constitutes generation, transmission, distribution, power trading, and related activities grew almost 3% to Rs 6,344.17 crore during the period, while the total segment revenue that also includes defence electronics, solar equipment, project contracts and infrastructure management services business rose 12.22% to Rs 7,385.20 crore during the period.
Earnings before interest, tax, depreciation and amortisation (EBITDA) was higher by 12% to Rs 1,831 crore as total income for the April-June quarter rose 3.08%. The cost of fuel, primarily thermal coal rose around 20% to Rs 2125.82 crore during the period. However, the 90% increase in price of imported coal was offset by strong performance from the mining business in Indonesia. Tata Power holds 30% in PT Kaltim Prima Coal, one of the largest thermal coal producing mines in the world, in Indonesia. It sold 30% in PT Arutmin Indonesia in 2014 for $400.92 million, although the deal is yet to conclude.