JSW Energy's profit plunged 97 per cent to Rs 3.4 crore in the quarter ended June, after recording a staggering Rs 232 crore foreign exchange loss. In the corresponding period last year, the net profit stood at Rs 136 crore.
"The profitability for the quarter is lower, primarily due to net foreign exchange loss of Rs 232 crore, considered an exceptional item, due to the unusual and sharp movement in the value of the rupee," the company stated. During the quarter, the rupee had seen erratic movement, even rising above 58/dollar.
Volatility in the rupee offset the sharp drop in international thermal coal prices. JSW Energy imports coal for its power plants at Ratnagiri in Maharashtra and Vijaynagar in Karnataka. "The benefits of the fall in coal prices have only marginally been realised, as inventory at the beginning of the quarter was fully consumed during the quarter," the company stated. It added due to higher power generation, fuel costs rose 63 per cent compared to the year-ago period.
Unable to secure long-term coal supply for its imported coal-based power projects, JSW Energy has been facing difficult times for many quarters. Its Barmer project in Rajasthan has a captive coal mine.
"We have been continuously exploring and evaluating various opportunities to acquire coal mining assets, especially in foreign markets," said Chairman Sajjan Jindal at the company's annual general meeting on Friday.
The company's total income rose 72 per cent to Rs 2,191 crore during the quarter, compared with Rs 1,274 crore in the year-ago period. Increased capacity aided the rise in income.
The company has decided not to aggressively pursue a few power projects planned earlier---the 1,320-Mw project in West Bengal, the 660-Mw project in Karnataka and the 1,620-Mw project in Jharkhand. "Presently, these are not being pursued aggressively, as clarity is awaited on various issues impacting the power sector," the company stated.
JSW Energy has appointed Sanjay Sagar as joint managing director and chief executive officer. He has also been inducted as additional director with effect from July 21.