Tata Power Reports Loss Yet Again

Tata Power has reported loss in its third quarter results. The results are below the market expectations as the company was expected to report a net profit of Rs 270 crore. Overall, the company has reported a net loss of Rs 291 crore against the net profit of Rs 294 crore posted a year earlier. The company reported a topline growth of 36% to Rs 9039 crore on a YoY basis. The higher provision for the loss in its Mundra project has impacted the company’s profit during the quarter.

Tata Power has made provision of Rs 600 crore against Rs 162 crore a year earlier. In the September 2012 quarter, it has made provision of Rs 250 crore, taking the total provision for the Mundra project to Rs 850 crore in the current fiscal. Last year, it had made a provision of Rs 1800 crore.

The company, during the quarter, has reported a 64% rise in its power business. It has commissioned three units of Mundra UMPP (2400MW) and 2 units of Maithon power project (1050 MW), due to which, it has reported a jump in the topline. In its coal business however it has reported a 9% decline in revenues.

During the December quarter, the company has seen the cost of power purchase increasing by 71%. Cost of fuel and coal processing charges also increased by over 50% each. Despite increased costs, its EBITDA margins improved as it reported nil deferred stripping cost in the quarter against Rs 577 crore reported in the December 2011 quarter. The company has also reported a 6% decline in the coal royalties. Its EBITDA margins stood at 20% showing a strong growth of 500 basis points.

The net profit of the company declined as it has reported a Rs 86 crore forex loss. Other income declined by 97% to Rs 11 crore on a YoY basis. Its profit before interest and tax (PBIT) increased by 14%. Interest cost was up by 72% to Rs 740 crore. Together with a surge in the interest cost and higher provision, the company reported loss at the profit before tax (PBT) level.