Home / Companies / Company-results /  Lanco Infratech loss widens to Rs584.3 crore in March quarter

Hyderabad: Power producer Lanco Infratech Ltd on Saturday widened its net loss to 584.29 crore for the quarter ended March on account of sluggish execution and underutilization of capacities at its power plants due to fuel shortages.

The company reported a net loss of 31.59 crore in the same period last year.

Total income from operations before elimination of intersegment income declined 24% to 2,827.48 crore, compared with 3,708 crore in the year ago. Finance costs stood at 656 crore.

For the full year to March, Lanco expanded its net loss to 2,274 crore from 1,070.2 crore in the previous year. Revenue declined 29% to 10,707.5 crore.

Revenue from the power business that contributes nearly two-thirds of Lanco’s revenues, declined 16% to 2,021 crore.

The average plant load factor, an indicator of capacity utilization, stood at 46% because of fuel shortages, infrastructure bottlenecks and maintenance shutdowns.

Lanco has a total operating capacity of 3,924 megawatts (MW).

Lanco said it needs to recover 2,823.5 crore from state utilities as of 31 March, of which dues from Karnataka alone amounts to 2,000 crore.

The engineering, procurement and construction (EPC) business declined by 25% to 728.6 crore “due to lower execution".

The company has an order book of 26,178 crore, of which 84% constitutes internal projects.

The company’s Australian coal mining subsidiary reported 62 crore profit in the fourth quarter despite a 65% fall in revenue to 145.4 crore. The average realization for the quarter fell to Australia $ 40 per tonne, compared with Australia $43 per tonne the previous year.

Lanco has a net debt of 36,022.1 crore as on 31 March.

“Due to delays in execution of contracts, the cost associated with price escalations, claims of the service providers, subcontractors and upwards revision of estimated cost, comprising of providing for expected loses on some ongoing projects and additional costs in recently completed or discontinued projects has resulted in losses for the quarter and for the year," Lanco said in a statement.

Lanco’s proposal to restructure loans worth 7,700 crore was approved by lenders in December. As per the condition laid down by lenders, Lanco needs to infuse additional funds through sale of assets.

“At present, the group’s operating assets are not generating envisaged revenues on account of various factors beyond the control of the company, such as short supply of coal, non-availability of gas, pending tariff clarity and delayed payments from the customers is posing challenges for meeting the cash flow needs," said G. Venkatesh Babu, managing director of Lanco.

India’s slowing economic growth and high borrowing costs have taken a toll on infrastructure projects, many of which have been stalled due to fuel shortage and delays in securing regulatory approvals and acquiring land.

The economic growth rate for fiscal 2014 is projected at 4.9%, marginally higher than 4.5% in the previous fiscal, by the Central Statistics Office.

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