GMR Infrastructure sees margins improving on airport tariff

GMR Infrastructure sees margins improving on airport tariff

Mumbai: GMR Infrastructure, which develops airports and power projects, expects its operating margins for Delhi airport to improve to over 40% once the regulator decides tariff structure in the next six months, officials said on Thursday.

“Cost review (for Delhi airport) is going on. Once this is completed, the tariff fixation will happen.... We are confident that we will go back to more than 40% Ebidta level," Group chief financial officer, Subbarao Amarthaluru, told reporters.

The company that relies on regulated tariff structure for its airports at Hyderabad and Delhi said its net profit in October-December was hurt because of higher costs at Delhi airport.

This also pulled down its consolidated Ebidta (earnings before interest, depreciation, tax and amortisation) margins to 28% from 32% a year ago.

Earlier in the day, the Bangalore-based firm reported a net loss of 222.5 million during October-December compared with a profit of 92 million a year ago, on net sales of 13.59 billion.

“(The) sharp rise in the interest and depreciation costs of Delhi Airport has adversely impacted the profit before tax and profit after tax for the quarter," GMR said in a statement.

The passenger traffic at Delhi airport was at 7.7 million in the quarter compared with 7.1 million a year ago and 6.72 million in July-September, Subbarao said.

Of the consolidated Ebidta of the group, the share of the airports was the highest at 1.74 billion, followed by the roads sector ( 820 million), power ( 810 million), and others ( 440 million).

The company’s net debt as on 31 December was at 153 billion, up from 110 billion during the same quarter previous financial year.

The group, which holds coal assets in Indonesia and South Africa, is assessing two-three coal mine assets in Australia and Indonesia, energy head Raj Kumar said, but declined to name the assets.

It is looking to commission its first coal-based power project in 2012 and is looking at shoring up its fuel supply by acquiring assets, Kumar added.

He said the company expects to tie up debt in this quarter for its 25 MW, 4-billion-rupee solar power project coming up in the state of Gujarat and two transmission projects in the state of Rajasthan.

The firm which meets its road and power project construction needs from its internal division of engineering, procurement and construction (EPC) has an order book of 35 billion rupees as of 31 December, Amarthaluru said.

At 11:45 am shares in the firm were up 5.2% in the Bombay Stock Exchange that was down 0.63%.