Tata Power posts over Rs.3 bn Q3 loss

Last Updated: Mon, Feb 11, 2013 15:30 hrs

Mumbai, Feb 11 (IANS) Tata Power Monday posted a consolidated net loss of Rs.3.29 billion in the third quarter of fiscal 2012-13 as against a profit of Rs. 2.98 billion in the corresponding quarter of last year, primarily due to providing for impairment charges.

The company reported an exceptional loss of Rs.6 billion during the quarter as against Rs.1.62 billion in the same period a year ago due to provision for impairment charges related to its Ultra Mega Power Project (UMPP) in Mundra, Gujarat.

"The management has reviewed and reassessed the recoverability of the carrying amount of the project (Mundra UMPP). Considering the fuel cost, exchange rate variation and other operating costs that would impact future cash flows on commencement of commercial operations, the management has concluded that a provision for impairment loss of Rs.600 crore (Rs.6 billion) for the December quarter and Rs.850 crore (Rs.8.5 billion) for the nine months of FY13."

Coastal Gujarat Power (CGPL), a wholly owned subsidiary of Tata Power, is implementing the 4,000 MW Mundra UMPP.

Increase in coal prices abroad is affecting the financial viability of the project, while the company has asked for higher tariff for electricity generated from the plant.

However, the total income from operations increased 27.18 percent from Rs.71.16 billion for the quarter ended Dec 31, 2011 to Rs.90.50 billion for the quarter ended Dec 31, 2012.

Consolidated net sales jumped more than 35 percent to Rs.89.92 billion from Rs.66.46 billion during the same period of the previous fiscal.

Revenues from its power business increased nearly 64 percent year-on-year to Rs.64.03 billion.

The company's earnings before interest, tax, depreciation and amortisation (EBITDA) increased nearly 85 percent year-on-year to Rs.18.54 billion and EBITDA margin improved 550 basis points year-on-year to 20.6 percent in the quarter in question.

The company reported foreign exchange losses of Rs.860.3 million as compared to a profit of Rs.3,879 million for the same period in the previous year.

Tata Power's fuel costs went up by 53 percent year-on-year to Rs.26.96 billion in the third quarter of the fiscal.

Depreciation cost moved up 69 percent to Rs.5.88 billion while finance costs increased 72 percent to Rs.7.41 billion during the quarter.

Tata Power shares recovered Monday after hitting a 52-week low of Rs.95.45, to close at Rs.97.60, up 0.51 percent from its previous close on the Bombay Stock Exchange.

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