Bangalore-based GMR Infrastructure Ltd, backed by a one-time exceptional income of Rs 140 crore, has reported a 32.7 per cent rise in net profit to Rs 71.1 crore for the second quarter ended September, compared to the corresponding quarter last year.
This rise in net profit masks a rather tepid growth in top line by just above two per cent, to Rs 1,221 crore. Ebitda (earnings before interest, taxes, depreciation and amortisation) for the quarter was down by 6.3 per cent to Rs 356.1 crore, as the company faced lack of demand in offtake of power from one of its generating stations.
The company, which has interests in airports, power generation and highways, said it had the benefit of writing back Rs 140 crore into the profit and loss account, written off earlier from one of its arms.
“When Intergen, in which GMR Infrastructure holds 50 per cent, was in control of a power project in Singapore, they had paid some advances to EPC (engineering, procurement, construction) contractors. Since the project was abandoned by them at that point of time, the advances had to be written off. GMR has since taken full control of that project and have gone to the same EPC contractors and adjusted the amount as part of the EPC price,” explained A Subbarao, president and group CFO.
Explaining the drop in Ebitda, the company said capacity costs had increased by 41 per cent to Rs 131 crore over the corresponding quarter, on partial capitalisation of T3, the new terminal in Delhi airport. GMR is in charge of upgrading and operating the international airport at Delhi and operating a new airport at
Hyderabad. It is also managing an airport in Turkey and is set to begin revamping one at Male.
While GMR’s airport division grew by 42 per cent, the flagship energy arm was sluggish, with revenues dropping by eight per cent at Rs 494.2 crore, mainly due to lower operations in the Chennai power plant and lower trading revenues.
Highways sector revenue grew by eight per cent to Rs 94.5 crore, even as the company said it would ‘cherry pick’ projects due to irrational competition in bidding.
Revenue expectations
Subba Rao said they expected Male International Airport to start contributing to the revenue stream from December. “It is likely to contribute $150 million per annum on an annualised basis. Net profit from the Male airport would be around $35 million from next financial year onwards,” he said.
He added there had been substantial progress with various global bidders to sell their 50 per cent in Intergen, a global power generator.
GMR had acquired a 50 per cent stake in Intergen for close to $1 billion nearly two years earlier and is expected to exit with marginal profits. “When we acquired that business, the economy was in a different shape. Now we see abundant opportunities in the domestic front and that is the reason to exit, as we have received unsolicited offers,” he said.
The company is sitting on gross debt of Rs 18,000 crore, with a leverage of 1.2 times, and is hoping not much will change during the rest of the financial year. During the second quarter, the company repaid Rs 800 crore of debt in GMR Infra and Rs 425 crore from GMR Energy.
Subbarao said the company was looking at raising $500 million for its Singapore project, Island Power, in due course.
