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Airports, Energy May Hit GMR This Quarter, Too

  • After a dismal third quarter, GMR Infrastructure is likely to remain under pressure in the fourth quarter too as two of its major sectors — airports and energy— are still awaiting resolution of some of the key issues.The company recorded a loss of about Rs108 crore in the third quarter ended December as against Rs62.5 crore loss in the sequential July-September quarter. Its Ebitda margins too shrunk to 22.5% as against 27.7% in the corresponding period.Net sales during the December quarter rose 10% to Rs1,999 crore as against Rs1,812.3 crore in the sequential quarter ended September. On a year-on year basis net sales grew 47%.
  • “The Ebitda margins and profitability were impacted due to certain issues in airport and energy sectors,” A Subba Rao, GMR’s chief financial officer, told analysts in an earnings call.He said the arrears from Nacil and non-allocation of airport development fee (ADF) by the airport regulator AERA at the Delhi airport along with the issues related to gas allocation for the power projects have pulled down the profitability of the company.With difficulties in accounting receivables from Nacil, the company has shifted the process to cash accounting or receivables on receipt basis.
  • The non-allocation of ADF at the Delhi airport too is estimated to have impacted the collection by Rs10 crore. “The impact of the airport sector on the balance sheet is to the tune of Rs60 crore,” he said, adding the impact of the energy sector is about Rs40 crore.The company, however, sees the situation getting better in the next fiscal.“We are expecting the ADF collection on revised tariff from April. Similarly, the empowered group of ministers (eGoM) is scheduled to meet on February 24 to find a solution for gas allocation.
  • Hopefully, we will see some positive resolution there. We should see a better performance in the next financial year,” Rao said.Also, plant load factors (PLFs) at key energy assets has dropped considerably. The 388-mw Vemagiri power project in Andhra Pradesh recorded 39% PLF as against 64% in the sequential quarter. The 200 mw Chennai unit had a PLF of about 55% while the 220 mw barge-mounted unit in Andhra Pradesh registered a PLF of 58%.“We will be signing long-term power purchase agreements only on availability of gas. Hope we will be able to achieve at least 60-65% PLF,” he said. A mandatory maintenance shutdown in Vemgiri too contributed to lower PLFs

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