Lanco Infratech Limited has posted a loss of RS 448 crore for the first quarter ended June 30, 2016 as against a loss of Rs 316 crore for the corresponding quarter last year.
The diversified infrastructure company has however seen its revenues going up by 10 per cent to Rs 1,728 crore for the first quarter as against Rs 1,569.5 crore it posted for the corresponding quarter last year.
The company performance and profitability was impacted due to inadequate fuel supplies to its gas based power plants and delays in implementing the EPC projects due to inadequate cash.
T Adibabu, Chief Operating Officer, Finance of Lanco Infratech Limited, told BusinessLine that the company had to contend with fuel supplied under the Government’s stranded projects scheme. This meant that the gas plants had to function at low capacities which impacted the overall finances.
Secondly, the EPC execution was also hit as there have not been enough cash flows and discussions are now under way with the consortium of lenders to ensure adequate cash flows and top up finance. “We are hopeful of striking a deal with lenders during the current quarter. This will enable us to take up the execution of some of the thermal power projects - Amarkantak, Babandh and Vidharbha. If works go as per plans, we expect to complete the execution of Amarkantak by the end of this fiscal, Babandh next fiscal and Vidharbha thereafter,” he explained.
Significantly, the Lanco gas plants at Kondapalli in Andhra Pradesh have secured gas linkage of 3.11 mmscmd under the Power Ministry initiative to back stranded projects. This will help generate power from October 2016 to March 2017.
The performance of the gas based plants along with improved functioning of the EPC once there is arrangement with the lenders as per RBI norms, would enable Lanco to increase the revenues significantly in the second half of this financial year, he said.
The company has a total EPC order book of Rs 26,794 crore, which includes its own contracts. While the road projects have been performing well, the realty venture in Hyderabad is looking up.
Stake sale issue
As per the terms with the lenders, the company has agreed to divest stake in some of the power projects as they near completion. This would enable Lanco to bring down its overall debt which has now gone up to Rs 37,000 crore plus the debt of about Rs 6000 crore due to Griffin coal mine in Australia.