Mumbai: Reliance Power Ltd (R-Power), the power generation arm of the Anil Ambani-led Reliance Group, posted a 22% increase in net profit for the quarter ended 30 June to Rs.240 crore from a year ago.
The increase in profitability was accompanied by a 110% increase in operating revenue, which stood at Rs.1,136 crore.
As in previous quarters, the growth in turnover and net profit was driven by higher power production from R-Power’s 1,200MW power plant in Rosa, Uttar Pradesh. The plant generated 2,055 million units, 73% higher than the year earlier, R-Power said in a statement to the bourses during market hours.
“Our performance in the first quarter of FY2012-13 has been highly satisfactory both in terms of revenue as well as profit growth,” R-Power chief executive J.P. Chalasani said in the statement. “The 1,200 MW Rosa plant in Uttar Pradesh has been operating at a high operational efficiency and the plant generated over 2 billion units of electricity in the quarter. I am happy that the 40 MW solar photovoltaic plant that we have built in Rajasthan has contributed to the bottom line in the first quarter.”
While addressing a media conference on Tuesday after announcing its results, Chalasani said that R-Power’s operating revenue was improving and the contribution of interest income to its numbers was coming down, which signalled that the firm was on course to achieving operational targets.
R-Power will have 5,000 MW of power generation capacity ready by the end of fiscal 2013, he added.
Chalasani also said at the conference that the earlier resistance of some of the established power producers to the idea of pooling domestic and imported natural gas to increase the overall availability to gas-based power plants in the country was gradually weakening.
Gas pooling was suggested by some of the power producers as a solution to the severe shortfall in supply of domestic gas, which has led to many power plants running at low utilization levels, thereby impacting their financial viabililty. If gas pooling was allowed, R-Power’s upcoming 2,400 MW gas-based power plant in Samalkot, Andhra Pradesh, could operate at 50-60% capacity, Chalasani said.
Another Reliance Group company, Reliance Infrastructure Ltd (R-Infra), posted a marginal growth of 2% in net profit for the three months ended 30 June to Rs.412 crore from the year earlier. Revenue rose 4% to Rs.5,383 crore. The company announced earnings on Tuesday after market hours.
R-Infra’s operating profit in the June quarter fell 14.43% to Rs.564.30 crore, mostly due to profits from the electricity generation and distribution business declining to Rs.352.78 crore, 33% lower than the year ago. However, the shortfall was made up by the interest income earned by the company, which at Rs.200.44 crore was more than double of what it earned in the June 2011 quarter.
R-Infra has transferred a major part of its holding in Delhi Airport Metro Express Pvt. Ltd out of its books to some associate companies. This is to prevent the challenges faced by R-Infra in the Delhi airport express project— which it operates on concession—hurting the company’s financials.
The Delhi airport metro line has been shut since July due to structural defects discovered by R-Infra that were brought to the notice of the Delhi Metro Rail Corp., which built the line.
“Majority of the holding has been transferred to associate companies, which is allowed as per the concession agreement,” R-Infra chief executive Lalit Jalan said. R-Infra holds around 95% in Delhi Airport Metro Express, out of which 30% has been retained in the company and the balance has been transferred.
“The transfer of stake is just an accounting entry, though I think R-Infra will continue to be liable for the project,” said an infrastructure sector analyst with a Mumbai-based brokerage. He declined to be identified. “The only benefit will be in case any contingent liability falls on the concessionaire (R-Infra) as a result of the ongoing challenges in the project, the impact on the consolidated accounts of the listed company will be marginal.”
The firm’s infrastructure division, which builds roads, reported an operating profit for the first time with earnings before interest and tax of Rs.36.39 crore, versus a loss of Rs.5.50 crore a year ago and a loss of Rs.27.28 crore in the March 2012 quarter.
R-Power ended Tuesday on BSE Ltd at Rs.93.05, up 0.87%, while the benchmark Sensex gained 0.54%. R-Infra ended at Rs.528.95, up 1.53%.
R-Power has sued HT Media Ltd, publisher of Mint, in the Bombay high court over a 12 May 2010 front-page story in Mint that it disputed. HT Media is contesting the case.