Reliance Power has registered 16% fall in its consolidated sales for the quarter ended Dec 2018 to Rs 2100.34 crore. But with OPM expand by 570 bps to 53.6%, the fall at operating profit moderated and stood at 6% to Rs 1126.38 crore. But the net profit after accounting for profit from discontinuing business was down by 32% to Rs 189.30 crore. But for marginally lower interest cost and lower taxation the fall at bottom line would have been higher considering lower other income and higher depreciation over the weak operating performance.
- The 570 bps expansion in OPM to 53.6% was largely due to sharp fall in fuel cost. Staff cost as proportion to sales net of stocks was up by marginal 30 bps to 2.4%. The other expenses were up by 160 bps to 11.3%. But with the fuel cost down by sharp 760 bps to 32.7% that has more than offset the rise in staff and OE. Thus facilitated by expansion in OPM, the fall at operating profit moderated to 6% (to Rs 1126.38 crore) largely hit by lower sales.
- Other income (net) was down by 46% to Rs 51.05 crore. Thus the fall at PBIDT was 9% to Rs 1177.43 crore. The interest cost was lower by 1% to Rs 739.89 crore. And the depreciation was up by 8% to Rs 202.87 crore. Thus the PBT was down by 34% to Rs 234.67 crore.
- The taxation net of deferred tax was down by 38% to Rs 46.40 crore. Thus spurred by lower tax the PAT stood lower by 33% to Rs 188.27 crore.
- Profit from discontinued business was flat at Rs 1.03 crore. Thus the net profit was down by 32% to Rs 189.30 crore.
- Other comprehensive expense was higher by 207% to Rs 77.95 crore. Thus the total comprehensive income was lower by 56% to Rs 111.35 crore.
Nine month performance
Consolidated sales were lower by 10% to Rs 6668.22 crore. But with operating profit margin expand by 210 bps to 50%; the operating profit was down by 6% to Rs 3331.97 crore. After accounting for lower other income, lower interest and higher depreciation cost the PBT was down by 20% to Rs 847.24 crore. The taxation was down by 38% to Rs 170.77 crore. Thus the PAT was down by 13% to Rs 676.47 crore.
Other Developments
In case of Vidarbha Industries Power Limited (VIPL), the Appellate Tribunal for Electricity (the "APTEL") in its order dated November 3, 2016, directed Maharashtra Electricity Regulatory Commission (MERC) to rework the fuel costs allowed to be recovered by VIPL, as part of its tariff. On January 3, 2017, MERC has filed an appeal against the order of the APTEL in Hon'ble Supreme Court. Pending disposal of the said appeal, VIPL has billed the tariff as per the terms of Power Purchase Agreement advice received with no Impact of disallowance, vide MERC order dated June 20, 2016, of Rs. 43,470 lakhs for FY 2014-15, Rs. 30,491 lakhs for FY 2015-16 and estimated disallowance of Rs 18,835 lakhs for FY 2016-17, Rs. 23,9141akhs for FY 2017-18 and Rs. 20,2221akhs for the Nine months ended December 31,2018.
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