Hyderabad: India’s largest independent power producer Lanco Infratech Ltd posted a 63% decline in third-quarter profit from the year ago, when one-off gains bolstered profit.
Consolidated net profit fell to Rs60.92 crore in the three-month period ended 31 December from Rs164 crore in the year earlier. Total income rose 58% to Rs4,595.9 crore from Rs2,909.53 crore.
“Last year in Q3 we had a one-time depreciation adjustment of Rs133 crore, and in this quarter we have to eliminate profit of Rs218.9 crore due to inter-company transactions. If you take into account these factors, the company recorded a 23% jump in cash profit to Rs468 crore,” Philip Chacko, director, investor relations, said in a phone interview.
Lanco’s construction business grew 25% to Rs2,551.7 crore. The company has orders worth Rs26,500 crore, of which 72% comes from internal projects.
Power, another key business, reported a growth of 9% to Rs1,116.5 crore. Lanco has an installed capacity of 4,367 megawatts (MW), one-third of which is gas-based.
Production from a 366MW gas-based power plant, Kondapalli-II, in Andhra Pradesh suffered due to low capacity utilization, with the plant load factor staying at 69%.
“The low plant load factor is due to the unavailability of sufficient supply of gas,” Chacko said. “We have taken up the issue with the government, hopefully expect some kind of a solution soon.”
The company in the third quarter commissioned the 1,200MW Anpara power plant in Uttar Pradesh and expects to start production from its second Udupi, Karnataka, unit of 600MW in the current quarter.
“The full impact of the 1,800MW capacity addition will be felt in the next two quarters,” said Chacko.
On Tuesday, Reuters reported that Lanco Infratech was in talks with investors to sell a minority stake to raise $600-750 million to fund expansion, citing a senior executive.
Lanco was able to make a profit of Rs55 crore for the first time from its Griffin coal mine in Australia, largely on account of a Rs102.3 crore foreign exchange gain. Lanco produced 0.77 million tonnes (mt) of coal in the third quarter. The company plans to “ramp up capacities to a maximum of 18-20 mt by 2017”, Chacko said.
Lanco acquired Griffin coal mines for A$730 million in March 2011.
“Lanco has a huge debt on its balance sheet, so it’s a positive sign that the company is trying to deleverage its balancesheet by raising funds through a stake sale,” said Satish Kantheti of Hyderabad-based brokerage house Zen Securities Ltd.
“Lanco could benefit if interest rates soften and the company improves utilization of its capacity.”
Lanco has a total debt of Rs33,215.3 crore.
Lanco stock rose 16.77%, or Rs2.70, to Rs18.80 on the BSE on Tuesday. The benchmark Sensex gained 0.43% to 17,848.57 points.
viswanath.p@livemint.com