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  • Adani Power
  • June 04,2019  18:48
  • Consolidated sales of Adani Power, a part of Adani Group and engaged in generation of power has registered a growth of 69% to Rs 6721.72 crore for the quarter ended March 2019. But with operating profit margin (OPM) contract by sharp 2200 bps to 9%, the operating profit fell by 51% to Rs 608.12 crore. After accounting for higher other income (up 654% to Rs 1356.17 crore) the PBIDT was up by 39% to Rs 1964.29 crore. As interest and depreciation cost as proportion to operating profit stand higher, the PBT was a loss of Rs 84.12 crore compared to a loss of Rs 631.08 crore in corresponding previous period. After accounting for higher tax write back (a swing of Rs 722.02 crore to Rs 718.76 crore), the PAT was a profit of Rs 634.64 crore against a loss of Rs 634.34 crore in corresponding previous period. Eventually the net profit (total comprehensive income) was an income of Rs 624.49 crore (compared to a loss of Rs 650.80 crore in corresponding previous period).
    • Units sold during Q4FY19 were 16.6 BUs as compared to 7.9 BUs during Q4FY18, a growth of 110%. Average Plant Load Factor (PLF) achieved during Q4FY19 was higher 79%(as compared to 37% achieved in Q4FY18) and this is largely due to better coal availability and strong demand from DISCOMs.
    • Revenue from operations was up by 69% to Rs 6721.72 crore. In Quarter ended Mar 2019, the company has considered an additional revenue of Rs 711.28 crore for the quarter following Adani Mundra Power (APMuL) sign supplemental power purchase agreement for 2434 MW with GUVNL effective Oct 15, 2018, which has been approved by CERC vide its order dated April 12, 2019. During the quarter ended March, 2019, the company has derecognized revenue from operations of about Rs 578.91 crore (net) pertaining to the period upto March 31, 2018 based on the notifications and orders received during the year ended March 31, 2019 from various regulatory authorities such as RERC/ MERC/ CERC and APTEL, relating to various claims. This further excludes de-recognition of revenue of Rs 1258.54 crore during the current quarter pertaining to 800 MW capacity linked to Lohara coal block for which order from regulatory authorities is still awaited by APML.
    • Crash in operating margin is largely due to higher fuel cost as well as power purchase cost. The fuel cost as proportion to sales was higher by 2080 bps to 74.1% and the power purchase cost was up by 510 bps to 7.3%. The staff cost was down by 70 bps to 1.4% and that of other expenses were lower by 330 bps to 8.1%.
    • Other income jumped by 654% to Rs 1356.17 crore. Jump in other income was largely due to recognition of other income pursuant to various orders of CERC/MERC/APTEL. Pursuant to the order of the CERC dated 11th March, 2019, during the current quarter APMuL has also recognized other income of Rs 217.75 crore (including Rs 216.58 crore pertaining to earlier years) on account of carrying cost for Change in law due to shortfall in domestic coal. Similarly, pursuant to the order of MERC dated in February, 2019, in the matter relating to award of carrying cost benefit on compensation towards shortfall in domestic coal, APML has recognized other income of Rs 843.26 crore during the quarter (including Rs 719.06 crore pertaining to earlier years), based on the submission of carrying cost claim as per the order, made with Maharashtra Discom. During the quarter, APML has already received Rs 152.94 crore out of the said amount. Likewise, pursuant to the order of Appellate Tribunal for Electricity (APTEL) dated 19th April, 2018 for 800 MW capacity and order of MERC dated 7th March, 2019 for 2500 MW capacity, in the matter relating to award of carrying cost benefit on approved change in law claims such as Clean Energy Cess, Compensation Cess, Goods and Service tax, Central Excise Duty, Royalty, Service tax on Freight, NMET e DMF. Busy Session Surcharge, Development Surcharge, etc., APML has recognized other income of Rs 131.69 crore during the quarter pertaining to earlier years based on the submission of carrying cost claim made with Maharashtra Discom, which has been fully recovered.
    • With interest cost stay flat at Rs 1356.75 crore, the PBDT jumped up to Rs 607.54 crore against Rs 50.31 crore in the corresponding previous period. The depreciation was up by 2% to Rs 691.66 crore and thus the PBT before EO was a loss of Rs 84.12 crore compared to a loss of Rs 631.08 crore in the corresponding previous period.
    • EO was nil for the quarter as well as corresponding previous period. Thus, the PBT after EO was a loss of Rs 84.12 crore compared to a loss of Rs 631.08 crore in the corresponding previous period.
    • The taxation was a write back of Rs 718.76 crore compared to a provision of Rs 3.26 crore in the corresponding previous period. Thus the PAT was up at Rs 634.64 crore compared to a loss of Rs 634.34 crore in the corresponding previous period.

    Yearly performance

    Units sold in FY19 were 15% higher at 55.2 BUs as compared to 48.0 BUs in FY18. Average Plant Load Factor (PLF) achieved during FY19 was 64%, as compared to 55% achieved in FY18.

    Consolidated sale for the period was up by 16% to Rs 23884.18 crore.

    Adani Power Maharashtra (APML) during the year has recognised an additional income of Rs 624.87 crore for the period upto March 31, 2017 in the matter of compensation in lieu of non-availability of coal linkages / coal under FSAs based on latest deliberations with Maharashtra State Electricity Distribution Company limited (MSEDCL), to revise certain cost parameters and other variables. For the period subsequent to April 1, 2017, MERC vide its order dated 6th February, 2019 has allowed further change in law claim on account of shortage of coal supply to APML. Based on the said order, APML during the year, has recognised revenue of Rs 1157.84 crore and Rs 743.32 crore pertaining to FY 2017-18 and FY 2018-19 respectively.

    Further during the fiscal ended March 31, 2019, Revenue from operations of about Rs 214.95 crore (net) have been recognised pertaining to the period upto March 31, 2018 based on the notifications and orders received during the year ended March 31, 2019 from various regulatory authorities such as RERC/ MERC/ CERC and APTEL, relating to various claims. This further excludes de-recognition of revenue of Rs 1258.54 crore during the current quarter pertaining to 800 MW capacity linked to Lohara coal block for which order from regulatory authorities is still awaited by APML.

    With OPM contract to 20.7% (from 27.7%) the operating profit was down by 13% to Rs 4953.83 crore. The other income jumped up by 414% to Rs 2477.45 crore. Thus the PBIDT was up by 20% to Rs 7431.28 crore. But with interest and depreciation cost as proportion to operating profit stood higher it was a loss of Rs 975.86 crore at PBT level compared to a loss of Rs 2078.92 crore in the corresponding previous period. After accounting for higher taxation (as provision of Rs 8.54 crore against a write back of Rs 5.15 crore in corresponding previous period) the loss at PAT level was Rs 984.40 crore compared to a loss of Rs 2073.77 crore in the corresponding previous period.

    Other developments

    The Hon'ble Central Electricity Regulatory Commission (CERC), on 12th April 2019, has approved the Supplementary Power Purchase Agreements (SPPAs) signed by the Company's wholly owned subsidiary, Adani Power (Mundra) Ltd. (APMuL), which operates the 4,620 MW power plant at Mundra, Gujarat, with the Gujarat Urja Vikas Nigam Ltd. (GUVNL). The SPPAs were signed pursuant to the High Power Committee Report adopted by the Government of Gujarat, and allow APMuL to recover fuel costs as pass through due to change in Indonesian regulations, subject to conditions, from the power procurer.

    Pursuant to the order of the CERC dated 11th March, 2019, during the current quarter APMuL has also recognized other income of Rs 217.75 crore (including Rs 216.58 crore pertaining to earlier years) on account of carrying cost for Change in law due to shortfall in domestic coal.

    Pursuant to the order of MERC dated in February, 2019, in the matter relating to award of carrying cost benefit on compensation towards shortfall in domestic coal, APML has recognized other income of Rs 843.26 crore during the quarter (including Rs 719.06 crore pertaining to earlier years), based on the submission of carrying cost claim as per the order, made with Maharashtra Discom. During the quarter, APML has already received Rs 152.94 crore out of the said amount.

    Pursuant to the order of Appellate Tribunal for Electricity (APTEL) dated 19th April, 2018 for 800 MW capacity and order of MERC dated 7th March, 2019 for 2500 MW capacity, in the matter relating to award of carrying cost benefit on approved change in law claims such as Clean Energy Cess, Compensation Cess, Goods and Service tax, Central Excise Duty, Royalty, Service tax on Freight, NMET e DMF. Busy Session Surcharge, Development Surcharge, etc., APML has recognized other income of Rs 131.69 crore during the quarter pertaining to earlier years based on the submission of carrying cost claim made with Maharashtra Discom, which has been fully recovered.

    Pursuant to the order of APTEL dated 14th August, 2018 in the matter relating to award of carrying cost benefit on approved change in law claims such as Clean Energy Cess, Central Excise Duty, Royalty, Service tax on Freight, NMET 8- DMF, Busy Session Surcharge, Development Surcharge, etc. and the same having been acknowledged by the RERC vide their order dated 24th September, 2018, during the year, APRL has recognized other income of Rs 119.12 crore (including Rs 105.44 crore pertaining to earlier years) relating to carrying cost benefit likely to accrue to APRL based on the submission of carrying cost claim made with Rajasthan Discoms. The above amount is yet to be realised.

    Pursuant to the order of APTEL dated 13th April. 2018 and CERC order dated 17th September, 2018 in the matter relating to award of carrying cost benefit on approved change in law claims such as Clean Energy Cess, I Compensation Cess, Countervailing Duty I Integrated Goods and Service Tax and Basic Custom Duty, during the year, APMuL has recognized other income of Rs61.48 crore relating to earlier years for carrying cost benefit based on the submissions of carrying cost claims made with Gujarat Discom and Haryana Discoms. Out of the said amount, Haryana Discoms have made full payment and Gujarat Discom has made payment of significant portion of the claim amount.

    Management Comment

    Gautam Adani, Chairman of Adani Power, commenting on the financial performance has said, Recent months have seen a veritable transformation in India's electricity sector regulation, which will go a long way in restoring the financial robustness of private sector power plants, and supporting economic growth through reliable and affordable power supply to the end consumers. The Adani Group, with its established Pit-to-Plug presence, is confident of leveraging its strengths to achieve its long term goals, and contributing significantly to nation building.

    Adani Power: Consolidated Financial Results

     

    1903 (3)1803 (3)Var. (%)1903 (12)1803 (12)Var. (%)
    Sales6721.723981.216923884.1820611.0416
    OPM (%) 9.031.020.727.7
    OP608.121233.56-514953.835707.64-13
    Other Income1356.17179.986542477.45482.39414
    PBIDT1964.291413.54397431.286190.0320
    Interest1356.751363.2305656.525570.232
    PBDT607.5450.3111081774.76619.80186
    Depreciation691.66681.3922750.622698.722
    PBT before EO-84.12-631.08-87-975.86-2078.92-53
    EO Income0.000.000.000.00
    PBT after EO-84.12-631.08-87-975.86-2078.92-53
    Taxation-718.763.268.54-5.15-266
    PAT634.64-634.34LP-984.40-2073.77-53
    Share of Profit/(Loss) from Associates0.00-18.91-1000.00-29.18-100
    Share of Profit/(Loss) of Minority0.000.000.000.00
    Net profit 634.64-653.25LP-984.40-2102.95-53
    Other comprehensive Income after tax (OCI)-10.152.45-514-7.744.34-278
    Total comprehensive income624.49-650.80LP-992.14-2098.61-53
    EPS (Rs)*##
    * Annualised on Current equity of Rs 3856.94 crore. Face Value: Rs 10
    Var. (%) exceeding 999 has been truncated to 999
    # Engineering and Construction activity being substantially seasonal EPS for quarter/ half year was not calculated
    LP: Loss to Profit PL: Profit to Loss
    ** This being first year of listing no comparative previous quarter
    Figures in Rs crore
    Source: Capitaline Corporate Database

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