Hit by lower asset utilisation and foreign exchange losses of Rs 230 crore, Lanco Infratech on Tuesday announced a loss of Rs 441 crore for the quarter ended June, its highest ever. The company's revenue, however, rose 87 per cent to Rs 1,867 crore. The Gurgaon-based company hopes to record a turnaround in the third quarter this financial year.
With an installed capacity of 3,324 Mw, Lanco Infratech is one of the biggest private companies in the power sector. It plans to raise Rs 3,000 crore through complete disinvestment of some non-core assets and by roping in strategic partners in generation projects.
Asked how the company would be successful in selling stakes, T Adi Babu, chief operating officer (finance), told Business Standard, "We want to maintain a Rs 2,000-crore cash portfolio at any point of time, by improving liquidity and reducing debt." As on June 30, the company had net debt of Rs 31,968 crore.
Besides lowering debt, the funds raised would also help the company increase equity contribution for its projects under execution. Adi Babu said the company would prefer a lower debt-to-equity ratio by reducing the debt contribution to four times of equity, instead of the current 4.38 times.
Lanco's low asset utilisation was primarily due to low coal and gas supply reducing the average plant load factor to less than 60 per cent at eight units. While this led to the contribution of the power business declining about half to Rs 173 crore in Q1, the resources business also recorded a Rs 127-crore loss.
Lanco, which acquired Griffin Coal Mining Company in 2010-11 through a subsidiary, saw the Australian entity contribute about Rs 150 crore to losses. Adi Babu attributed this to the $12-a-tonne fall in average coal prices during the quarter. "We expect international coal prices to stabilise at about $70 by 2013," he said.
The company stock on Tuesday closed at Rs 12.5 on the BSE, a fall of 3.25 per cent from the previous close.