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Tata Power today posted a net profit of Rs 75 crore for the second quarter, on account of a massive forex loss of Rs 354.5 crore, as well as an increase in finance costs and lower income from its coal companies. In the same quarter last year, it posted a loss of Rs 84 crore, on account of a Rs 250 crore impairment charge it took, to account for lower earnings from its Mundra power plant.
However, as the company's profit from operations increased 39 per cent to Rs 1,342 crore, as all the units from its Mundra and as well Maithon power plants are operational. Its revenues too went up 14 per cent to Rs 8,765 crore, from Rs 7,699.7 crore in the corresponding quarter.
“In the second quarter, the company's revenue growth is driven by operations of all the units of Mundra and Maithon. All our projects and subsidiaries have performed well. However, we continue to be pressurised by higher forex losses,” said Anil Sardana, managing director of Tata Power. The massive 4,000 megawatt Mundra power project, is based on imported coal.
Apart from adding to foreign exchange losses, the project has been in trouble after the power to decide its its coal price was taken away by a new Indonesian mining law. Tata which owns 30 per cent in coal mines in the country, had planned on sourcing at pre-determined prices, but the country forced all such exports to be benchmarked to international prices.
The company had asked for a tariff revision which is being considered by the government. “On the Mundra UMPP tariff revision front, we have continued to honour our commitment by providing power supply through the project. This has put immense pressure on our bottom line and no company can afford to continue to incur such heavy losses. We are eagerly awaiting quicker resolution of this issue,” said Sardana. The matter is now being considered by the central power regulator, which formed a committee.
Tata's earnings from Indonesian coal companies have been slow too as well. The pre-tax profits from coal business went down 83 per cent to Rs 91 crore, due to lower price realisation.
