Mumbai: JSW Energy Ltd on Saturday reported a 91.74% decline in consolidated net profit for the quarter ended on 31 March at Rs24.76 crore, mainly on the back of the fall in revenues.
The company had reported a net profit of Rs299.94 crore in the corresponding quarter last fiscal. Its total revenues for the quarter declined 29.21% to Rs1,862.06 crore from Rs2,630.71 crore a year-ago, the company said in a statement.
“The total income from operations at the consolidated level decreased by 29%, largely due to lower generation primarily from the thermal plants and subdued merchant realisations. The fuel cost for the current quarter decreased by 16% Y-O-Y to Rs1,005 crore, primarily due to decrease in generation, offset by an increase in the international prices of coal,” it said.
During the quarter, JSW Energy generated 4,063 million units as against 5,804 million units a year ago, while the merchant sales during January-March 2017 were 1,312 million units and the sales under long-term power purchase agreement were 2,833 million units.
Its deemed plant load factor (PLF) during the quarter was 52% as against 69% in the corresponding period of the previous year. For the year, the total income from operations stood at Rs8,264 crore as against Rs9,824 crore over the previous year, a decline of 16%. Its profit also declined to Rs629 crore from Rs1,447 crore in FY16.
On the outlook of the sector, the company said, “Industrial activity remains subdued and should get some support in the coming months as manufacturing PMI has been rising at a steady pace. However, inflation has been inching up slowly and would eventually reduce the scope of further interest rate cuts in the near term. Expectations of a normal monsoon, along with the government initiatives on infrastructure and investment cycle revival, should help in improving the overall GDP growth and power demand.” It further said the electricity demand continued to slow down for the second year in a row with only 2.5% growth for FY 2017, while growth in supply is consistently outpacing the demand growth.
“Tepid demand combined with the poor fiscal health of the discoms and lack of PPAs has driven an oversupply in the market with falling tariffs and low PLF. Through accelerated decommissioning of old, inefficient and polluting plants, the government can address part of the overcapacity in the sector.
“Most of the states have joined the UDAY scheme and the discoms should be able to gradually improve their performance if they continue to pursue the prescribed operational reforms,” the company said. Further, the government’s aim to provide round-the-clock power supply to all should also boost power demand over the longer term, it said.