Adani Enterprises plunges into loss in Q1 due to fall in rupee

Firm posted net profit of Rs 403 cr in corresponding quarter of the previous fiscal

Hit by mark to market (MTM) losses on account of rupee depreciation, Adani Enterprises has plunged into a consolidated net loss of Rs 278.30 crore during the first quarter ended June 30, 2013.

The flagship firm of the Adani group had posted a net profit of Rs 402.88 crore in the corresponding quarter of the previous fiscal.

"Consolidated net loss for Q1FY14 is Rs 278 crore due to MTM provision for rupee depreciation, non-cash items like depreciation, provision for deferred tax and higher imported coal due to limited availability of domestic coal in power business," Adani said in a statement.

On a standalone basis also, the company reported a net loss of Rs 135.90 crore for the last quarter.

Its consolidated net sales, at Rs 11,524.94 crore, was up 4.54% during the quarter vis-a-vis Rs 11,024.59 crore of the Q1FY13.

Adani's total expenditure, at Rs 10,616.95 crore, amounted to over 92% of its net sales during the quarter as its costs on depreciation rose by nearly 50% to Rs 718.41 crore.

Moreover, its MTM losses more than doubled to Rs 528 crore in the quarter, while the finance costs were up 58.66% to Rs 1,082.76 crore.

Commenting on the results, Adani group chairman Gautam Adani said, "We are confident of overcoming the present difficulties faced by the power sector and enriching its financial performance in the ensuing quarters. Our integrated business model of Resources, Logistics and Energy sectors is best suited to reap benefits of sustainable growth."

Adani group CFO Devang Desai said that "our quarterly financial performance has been adversely affected due to sudden currency volatility and continuing constraints of coal availability, transmission bottleneck and tariff related issues in the power business.

He added that company follows a judicious currency hedging policy, which is in line with its business aligned financial strategy.

"With focused efforts, we shall ensure sustainable returns from the power business and improve our overall performance," he said.

Performance of company's different business segments were mixed during the quarter. While the Trading business reported a 0.21% decline in gross revenues to Rs 4,587.58 crore, Power business' earnings were up nearly 72% to Rs 2,567.19 crore.

Revenues from Ports were up over 52% to Rs 1,277.22 crore, while Agro business' earning were down nearly 20% to Rs 1,994.58 crore.