Infrastructure firm Jaiprakash Associates (JP Associates) has posted 26% fall in standalone sales to Rs 1906.16 crore for the quarter ended March 2016. Further with 660 bps contraction in operating profit margin, the operating profit declined by sharp 91% to Rs 17.46 crore. The other income was down by 79% to Rs 7.85 crore, the interest cost was lower by 6% to Rs 845.46 crore but depreciation was up by 1% to Rs 245.47 crore. Thus, net losses widened to Rs 1,387.3 crore from a net loss of Rs 858.07 crore in the same period, a year ago.
Standalone Quarterly Performance
The total income from operation declined 26% to Rs 1906.16 crore for the fourth quarter ended March 2016. Downside in revenue is largely due as both the major business of the company register fall in sales. Segment revenue of cement division was down by 21% (to Rs 1197.88 crore or 62% of sales) and that of construction was down by sharp 26% (to Rs 547.89 crore or 29% of sales). Similarly the segment revenue of Hospitality & Golf was flat at Rs 72.15 crore (or 4% of sales). The segment revenue of real estate fell 90% to Rs 16.95 crore (or 1% of sales). The segment revenue of others was down by 68% to Rs 23.85 crore (or 1% of sales). However, the segment revenue of power segment grew 237% to Rs 53.60 crore (or 3% of sales).
Operating margin (OPM) reduced by 660 bps to 0.09%. As percentage to sales and net of stock adjustments, raw material cost inclined 110 bps to 32.8%, employee benefit costs rose 260 bps to 9.7%, stock adjustment cost increased 930 bps to 9.9%, and other expenses gained 750 bps to 27.8% during the period. Thus, contraction in OPM leads to sharp drop in Operating Profit (OP) by 91% to Rs 17.46 crore.
At segment level, The Company suffered loss of Rs 244.70 crore at EBIT level as compared losses of Rs 21.56 crore corresponding previous quarter. The cement business has reported a segment loss of Rs 131.81 crore compared to a loss of Rs 41.23 crore in the corresponding previous period. Similarly, the construction division has reported a segment loss of Rs 44.30 crore compared to a profit of Rs 16.70 crore in the corresponding previous period, Sports event segment registered loss of Rs 43.62 crore as compared loss of Rs 41.49 crore corresponding previous period, and real estate segment suffered loss of Rs 33.88 crore as compared profit of Rs 31.20 crore year ago period. The investment division booked a segment loss of Rs 0.41 crore compared to a profit of Rs 0.33 crore in the corresponding previous period. However, hospitality division registered a segment profit of Rs 10.44 crore compared to a segment loss of Rs 41.49 crore in the corresponding previous period.
Other income dropped by 79% to Rs 7.85 crore. Interest cost declined by 6% to Rs 845.46 crore but depreciation cost rose by 1% to Rs 245.47 crore. Thus, the company suffered loss of Rs 1065.62 crore at PBT (before EO) level compared to a loss of Rs 908.46 crore in the corresponding previous period.
EO was an expense of Rs 321.70 crore compared to an expense of Rs 238.86 crore in the corresponding previous period. The exceptional item for the quarter represents (1) the expenditure incurred in relation to Oil & Gas Exploration amounting to Rs 181.60 crore written off on surrender of South Rewa block due to delay in getting environment clearance for digging of third well and (2) provision for Diminution in value of Non-Current Investments/Advances amounting to Rs 91.35 crore.
Thus the loss has widened to Rs 1387.32 crore at PBT after EO level compared to a loss of Rs 1147.32 crore in the corresponding previous period. The taxation was Nil during the quarter compared to a write back of Rs 289.25 crore in the corresponding previous quarter. Thus, the company registered net loss of Rs 1387.32 crore compared to a loss of Rs 858.07 crore in the corresponding previous quarter.
Annual Financial Performance
For the financial year ended March 2016, Standalone sales were lower by 20% to Rs 8793.82 crore. With 1000 bps contraction in OPM, the operating profit was lower by 61% to Rs 851.13 crore. After accounting for lower other income, higher interest and lower depreciation cost the PBT before EO was a loss of Rs 23698.08 crore compared to a loss of Rs 2075.41 crore in the corresponding previous period. The Company suffered EO expenses of Rs 271.84 crore as compared EO income of Rs 243.42 corresponding previous year. Thus, the loss at PBT after EO level increased 117% to Rs 3969.92 crore. Taxation was a write back of Rs 730.02 crore compared to a write back of Rs 553.25 crore in the corresponding previous period. Thus, the company registered net loss of Rs 3239.90 crore compared to a loss of Rs 1278.74 crore in the corresponding previous period.
Other developments
The Board of Directors of JP Associates has approved the Definitive agreement with UltraTech Cement for sale of part of its cement business (including its 100% subsidiary Jaypee Cement Corp) comprising identified operating cement plants with an aggregate capacity of 17.20 MTPA spread over the states of Uttar Pradesh, Madhya Pradesh, Himachal Pradesh, Uttarakhand, and Andhra Pradesh at Enterprise Value of Rs 15900 crores. The transaction is subject to regulatory approvals.
During the quarter, Unit-I of 660 MW of Bara Super Critical Thermal power project, being implemented by Prayagraj Power Generation Company (a subsidiary of Jaiprakash Power Venture, which is also a subsidiary of the company) has successfully commenced commercial operations.
During the quarter, the Company has received Letter of Award from National Highway Authority of India for two package in respect of Four Laning of Varanasi-Gorakhpur Section of NH-29 I.e. package III Birnon village to Amilla village from KM88 to KM 148 & Package IV Amilla village to Gorakhpur from KM148 to KM 248 for a contract price of Rs 840 crore and Rs 1030 crore, respectively.
The stock hovers around Rs 5.71 (27 May 2016) at BSE.