With air traffic slowing down considerably — there has actually been a fall in passenger traffic in the five months between June and October this year compared with 2007 — GMR Infrastructure’s revenues for the current year are likely to be hit. The weak environment also hampers GMR’s ability to negotiate any increase in charges.
The impact will not be small because revenues from this stream account for nearly 40 per cent of GMR’s top line---the company operates the Delhi and Hyderabad airports Already the one –year delay in the development of the land around the Delhi airport , for which GMR has been allowed to collect lease deposits upfront from bidders, will hurt the firm.
Besides, the inadequate supplies of gas are resulting in the firm not being able to run its power plants efficiently. The power business, which brings in 51 per cent of revenues, fared reasonably well in the September 2008 quarter after adjusting for the one time income from Intergen---a company in which GMR bought a 50 per stake earlier this year.
GMR runs three plants with a total capacity of 790 mw of capacity and is hoping to be able to run these at higher load factors by early next year, especially the Vemagiri plant in Andhra Pradesh.
The firm’s top line has risen 99 per cent in the first six months this year, with help from the one –time success fee. Last year GMR’s revenues stood at Rs 2,698 crore and while the outlook has been good till recently, the difficult operating environment is making it hard to assess what the revenues for the current year could be, that’s possibly why the estimates range between Rs 3,200 crore and Rs 3,900 crore.
It’s equally difficult to get a handle on the profits—the numbers range between Rs 200 crore and Rs 240 crore over the Rs 210 crore posted last year. In the September quarter, the profit before tax was up just 18 per cent after adjusting for a forex loss of Rs 59 crore. With access to gas and new roads likely to be commissioned, FY10 promises to be a better year.
