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Lanco Infratech missed street expectations on every parameter with the third quarter (October-December) loss widened to INR 503 crore as against INR 465 crore in same quarter last year, dented by forex loss and lower revenues. Revenues fell 31.3 percent to INR 2,397 crore in the quarter ended December 2013 from INR 3,489 crore in a year ago period on account of lower income in both segments - EPC & construction and power.

Consensus expectations were loss of INR 409 crore on revenues of INR 2,767 crore for the quarter. Lanco reported a forex loss of INR 79 crore during December quarter as against forex loss of INR 43 crore in corresponding quarter of last fiscal.

Earnings before interest, tax, depreciation and amortisation (EBITDA) declined 19.1 percent year-on-year to INR 458 crore and operating profit margin slipped 290 basis points to 19.1 percent in the quarter gone by. However, the decline in cost overheads across the board kept margins cushioned. Other income doubled to INR 73.7 crore from INR 37.7 crore during the same period. Segmental analysis

Revenues of EPC and construction business, which contributes 20-30 percent of total revenues, dropped 33 percent to INR 625 crore during October-December quarter. Lanco reported earnings before interest and tax (EBIT) loss of INR 40 crore as against positive EBIT of INR 70 crore year-on-year.
Power business accounts for 60-70 percent of revenues of the company, which posted revenues of INR 1,735 crore in the third quarter, down 32 percent compared to INR 2,534 crore in same quarter last year.
Power EBIT rose 14 percent on yearly basis to INR 412 crore and margin expanded 940 basis points to 23.7 percent in the quarter gone by. Meanwhile, the board of directors proposed to obtain shareholders' approval through postal ballot process for implementation of corporate debt restructuring that approved by CDR Empowered Group on December 11.

It had announced it will enter corporate debt restructuring for standalone debt of INR 7,300 crore. Gross debt of the company stands at INR 36,392 crore. Debt for projects under operation stands at INR 17,856 crore and for projects under construction is at INR 18,536 crore.

Lanco Hydro Power (LHPL), a subsidiary of the company, has signed an agreement with Tejassarnika Hydro Energies Private Limited (subsidiary of Hyderabad based Greenko Energies) to divest 100 percent stake in 70 MW Lanco Budhil Hydro Power Project. LHPL has also entered into an MOU to sell two small hydro power plants of 5 MW each located in the Kangra district of Himachal Pradesh, to Greenko Energies.

Source-On Request