Wage increase provision squeezes NTPC, full-year net up just 5.56%

Wage increase provision squeezes NTPC, full-year net up just 5.56%
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First Published: Wed, Apr 08 2009. 11 44 PM IST

 Power plans: NTPC chairman R.S. Sharma (right) and director (finance) A.K. Singhal. The firm is scouting for coal assets abroad. PTI
Power plans: NTPC chairman R.S. Sharma (right) and director (finance) A.K. Singhal. The firm is scouting for coal assets abroad. PTI
Updated: Wed, Apr 08 2009. 11 44 PM IST
New Delhi: State-run NTPC Ltd, India’s largest power generator, said on Wednesday that fiscal fourth-quarter net profit rose 29.85% from a year earlier as it benefited from higher electricity output and improved efficiency, but full-year profit growth was crimped by provisions for a wage increase.
Power plans: NTPC chairman R.S. Sharma (right) and director (finance) A.K. Singhal. The firm is scouting for coal assets abroad. PTI
Net profit for the three months ended 31 March rose to Rs1,739.5 crore, from Rs1,339.5 crore a year ago. Revenue rose 10.82% to Rs12,731 crore.
For the full year ended 31 March, net profit rose 5.56% to Rs7,827.4 crore, from Rs7,414.8 crore in the preceding year, with growth crimped by provisions for higher wages. Its full-year revenue rose 14.17% to Rs42,182.4 crore.
“We have made a provision for wage revision of Rs1,402 crore. Had this not been made our (full-year) net profit would have been higher,” said A.K. Singhal, director of finance at the state-owned power utility.
Increased earnings would help NTPC expand its power generating capacity and meet rising demand. NTPC, which has a power generation capacity of 30,144MW, plans to add 3,300MW during the current fiscal. The utility also plans to acquire coal mines in Mozambique and Indonesia.
The company plans to borrow Rs11,330 crore in 2009-10 and is hopeful of starting coal production from captive coal blocks during the 11th Plan (2007-12). It plans to import 13 million tonnes of coal in the current year to meet demand for its thermal power projects.
“We will be certainly getting some coal blocks abroad in 2009-10... We have got proposals from four groups in Indonesia and two groups in Mozambique. These proposals are being examined by our consultants,” chairman and managing director R.S. Sharma told reporters.
NTPC is looking at a coal block in Mozambique that will require a total investment of around Rs5,000 crore. The coal property will have an initial capacity of around 5 million tonnes per annum (mtpa) that can be increased to 25mtpa.
“This is a government of India initiative where we plan to build power projects there and also train their engineers for running their projects,” said another NTPC executive, who didn’t want to be identified. “However, in order to transport that coal to India, there is a massive need for developing the local transportation infrastructure.”
Indian Railways’ RITES Ltd, which provides engineering, consultancy and project management services in the infrastructure sector, and infrastructure construction company Ircon International Ltd already have a presence in Mozambique, the executive said.
NTPC’s stock on Wednesday rose Rs12.3, or 6.66%, to Rs196.90 at the close of trading on the Bombay Stock Exchange. The exchange’s benchmark index Sensex rose 1.97% to 10,742.34 points.
“There are no surprises, it is slightly below expectations. The outlook for the company is stable,” said Madanagopal R., an equity research analyst at Mumbai-based Centrum Broking Pvt. Ltd, who has a “hold” rating on the stock.
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First Published: Wed, Apr 08 2009. 11 44 PM IST
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