OREANDA-NEWS. Eagerly awaits CERC’s decision on PPA tariff revision for Mundra Ultra Mega Power Project (UMPP) to address persistent impairment

Consolidated Q3 revenues cross Rs9,000 crore; YTD revenues up 28 percent at Rs23,992.97 crore

Consolidated Q3 operating profits 91 percent up at Rs1,267.39 crore; YTD operating profits 7 percent up at Rs3,141.64 crore

Consolidated FY13 Q3 and YTD performance

Tata Power group’s Q3 consolidated revenues grew by 36 percent to reach Rs9,039.31 crore

Operating profit grew by 91 percent at Rs1,267.39 crore

Q3 consolidated PAT stood at Rs(328.92) crore, with an impairment provision of Rs600 crore in CGPL

Nine months consolidated revenues up 28 percent at Rs23,992.97 crore

Nine months operating profit up 7 percent at Rs3,141.64 crore

Nine months consolidated PAT improves to Rs(266.79) crore, with an impairment provision of Rs850 crore in CGPL

Standalone FY13 Q3 and YTD performance

Q3 standalone revenue grew by 13 percent to Rs2,549.11 crore

Q3 standalone operating profit up 35 percent at Rs440.40 crore

Q3 standalone PAT stood at Rs216.38 crore

Nine months standalone revenues up 20 percent at Rs7,353.01 crore

Nine months standalone operating profit up 12 percent at Rs1,033.84 crore

Nine months standalone PAT at Rs824.66 crore

Editorial synopsis

Key financial highlights: Consolidated Q3 FY13 vs Q3 FY12

Consolidated revenue stood at Rs9,039.11 crore up 36 percent as compared to Rs6,659.87 crore

Operating profit grew by 91 percent at Rs1,267.39 crore as compared to Rs664.75 crore

Consolidated PAT stood at Rs328.92 crore as compared to Rs297.95 crore

Key financial highlights: Consolidated YTD FY13 vs YTD FY12

Consolidated revenue up 28 percent at Rs23,992.97 crore as compared to Rs18,766.64 crore

Operating profit up 7 percent at Rs3,141.64 crore as compared to Rs2,939.85 crore

Consolidated PAT improved to Rs(266.79) crore as compared to Rs458.93 crore

Key financial highlights: Standalone Q3 FY13 vs Q3 FY12

Standalone revenue grew 13 percent at Rs2,549.11 crore as compared to Rs2,251.86 crore

Operating profit up 35 percent at Rs440.40 crore as compared to Rs326.35 crore

Standalone PAT stood at Rs216.38 crore as compared to Rs458.16 crore

Key financial highlights: Standalone YTD FY13 vs YTD FY12

Standalone revenue up 20 percent at Rs7,353.01 crore as compared to Rs6,121.15 crore

Operating profit up 12 percent at Rs1,033.84 crore as compared to Rs920.80 crore

Standalone PAT stood at Rs824.66 crore as compared to Rs1,052.76 crore

Key business and growth highlights

Generation capacity touches 7,700MW with commissioning of Unit 4 of Mundra UMPP

Executes distribution franchisee agreement (DFA) for electricity distribution in Jamshedpur circle

Proposes revised multi-year tariff for Mumbai distribution to factor in costs incurred on Mumbai network expansion, wheeling charges and fuel price hikes

Acquires 26 percent stake in large mines at PT Baramulti Suksessarana Tbk (BSSR), Indonesia

Proposes cost reduction for its Mumbai customers through modernisation of 500MW unit #6 at Trombay thermal power station

25MW solar project at Mithapur gets registered for CDM benefits by UNFCC

Mumbai: Tata Power, India's largest integrated power company announced its results for the quarter ended December 31, 2012.

Performance highlights Q3 FY13: consolidated

On the consolidated basis, Tata Power's Q3 FY13 revenues increased 36 percent to Rs9,039.31 crore as compared to Rs6,659.87 crore in the corresponding quarter last year primarily on account of additional revenue generated from Mundra, Maithon and the higher fuel cost of Mumbai operation and power purchase costs of Tata Power Delhi Distribution (TPDDL).

Operating profit rose by 91 percent at Rs1,267.39 crore as compared to Rs664.75 crore in Q3 FY12. The increase is mainly due to higher contribution from Mumbai operations, Mundra, Maithon and Delhi distribution.

Profit before finance cost, tax and exceptional items was up by 14 percent at Rs1,278.41 crore as compared to Rs1,120.57 crore in the corresponding quarter last year.

PAT stood at Rs(328.92) crore as compared to Rs297.95 crore in the corresponding quarter last year and was impacted by the following

An additional impairment provision of Rs600 crore provided in the current quarter after review of recoverability of carrying cost from its future earnings. With this impairment, equity of CGPL (100 percent subsidiary developing Mundra UMPP) has eroded substantially and the company eagerly awaits CERC's decision on PPA tariff revision for Mundra UMPP to address long term sustainability.

Falling coal prices leading to lower rate realisation from Indonesian coal companies.

Last year's PAT had a deferred stripping cost of Rs577.32 crore and reversal of Rs310 crore of forex losses due to adoption of Accounting Standards (AS) -11.

On consolidated segment-wise performance for the quarter, revenues from the power business increased by 64 percent at Rs6,403.33 crore as compared to Rs3,909.85 crore in the corresponding quarter last year. Revenue from coal business was up by at Rs2,464.02 crore as compared to Rs2,700.71 crore in Q3 FY12. PBIT from power business was at Rs966.46 crore as against Rs481.92 crore in the corresponding quarter last year due to higher contribution from Mumbai operations, Mundra, Maithon and Delhi distribution.

During the quarter, price realisations were lower from coal business. However, PBIT from coal business was up by 130 percent at Rs310.92 crore as compared to Rs135.27 crore reported in the corresponding quarter as last year included a deferred stripping cost of Rs577.32 crore.

Performance highlights Q3 FY13: standalone

During the quarter, Tata Power's results reflected a strong financial and operational performance. Standalone revenue grew to Rs2,549.11 crore, up 13 percent as against Rs2,251.86 crore in Q3 FY12.

Operating profit was up by 35 percent at Rs440.40 crore as compared to Rs326.35 crore in the corresponding period last year on account of better performance by Mumbai operating assets. In the current quarter, the company has accrued carrying cost (income to be recovered in future tariff determination) amounting to Rs130 crore on all the regulatory assets outstanding in Mumbai licensed area pursuant to ATE judgment.

PAT stood at Rs216.38 crore and is impacted by the following items

Nil dividend from coal companies as against Rs63 crore last year

Reversal of Rs310 crore of forex losses last year due to adoption of Accounting Standards (AS) -11.

Performance highlights nine months FY13: consolidated

On the consolidated basis, Tata Power's revenues increased 28 percent to Rs23,992.97 crore as compared to Rs18,766.64 crore in the corresponding period last year.

Operating profit was up 7 percent at Rs3,141.64 crore as compared to Rs2,939.85 crore in the corresponding period last year. However, last year included a deferred stripping cost of Rs577.32 crore.

Profit before finance cost, tax and exceptional items was up by 14 percent at Rs3,283.69 crore as compared to Rs2,890.63 crore in the corresponding period last year.

PAT has shown an improvement over the previous year [current year loss at (Rs266.79) crore as compared to previous year loss of (Rs458.93) crore] on account of increased operating profit.

On consolidated segment-wise performance, revenues from the power business was up 45 percent to Rs16,715.88 crore as compared to Rs11,564.58 crore in the corresponding period last year and coal business was at Rs6,785.83 crore as compared to Rs6,858.69 crore in the corresponding period last year. PBIT from power business was at Rs. 2262.09 crore as against Rs1,571.07 crore and PBIT from coal business stood at Rs858.71 crore as compared to Rs1,481.58 crore reported in the corresponding period last year due to lower realisation from Indonesian coal companies.

Performance highlights nine months FY13: standalone

Standalone revenue grew to Rs7,353.01 crore, up 20 percent as against Rs6,121.15 crore in the corresponding period last year.

Operating profit was up by 12 percent at Rs1,033.84 crore as compared to Rs920.80 crore mainly due to better performance by Mumbai operating assets.

PAT stood at Rs824.66 crore as compared to Rs1,052.76 crore in the corresponding period last year due to lower coal dividends this year and reversal of Rs310 crore of forex losses due adoption of AS-11 last year.

Commenting on the company’s performance, Anil Sardana, managing director, Tata Power, said, “During the quarter, the company reported strong financial and operational performance driven by all our business divisions. All our projects and subsidiaries continue to perform well. We are happy to announce that the company has reported robust growth in revenues and has crossed the Rs9,000 crore mark this quarter.

"Our generation capacity touched 7700MW with the commissioning of Unit 4 of 4000MW Mundra Ultra Mega Power Project, reinforcing our position as the largest integrated power company as well as private power producer in India. Whereas Tata Power has commissioned its UMPP ahead of schedule and is contributing brilliantly to the national economy, it is hoped that decision in respect of fuel prices is taken early and constant impact on Tata Power's networth is salvaged. Our distribution footprint grew both on the domestic and international front. We were awarded the distribution franchise for Jamshedpur circle in Jharkhand and the company also bagged international projects in Nigeria and Kenya.

"The accumulating regulatory assets in Delhi and Mumbai are a matter of concern and it is important to address this. Price realisations from the Indonesian coal companies are lower due to falling coal prices in the current quarter, however, the coal prices have stabilised in the recent weeks.”

Operational highlights

During the quarter under review, the company continued its robust operations and performed well. Sales volume for the quarter stood at 3998 MUs as compared to 3922 MUs in Q3 FY12. The overall generation was 3873 MUs as compared to 3970 MUs reported in corresponding quarter last year. Trombay Thermal Power Station generated 2400 MUs as compared to 2565 MUs in the corresponding quarter last year. Hydro Power Stations generated 341 MUs as compared to 321 MUs. Jojobera Thermal Power Station generated 784 MUs as compared to 711 MUs and Haldia reported generation of 239 MUs as compared to 225 MUs in the corresponding quarter last year. Industrial Energy Limited (IEL) reported generation of 383 MUs as compared to 384 MUs. Wind farms generated 99 MUs as compared to 83 MUs in the corresponding quarter last year. Solar plant recorded generation of 1 MU as compared to 1 MU.

Business highlights: key subsidiaries

Coastal Gujarat Power (CGPL): CGPL, an SPV formed for setting up and operating the 4000MW Mundra UMPP announced commissioning of 800MW sized Unit 4 of 4000MW Mundra Ultra Mega Power Project (UMPP) on January 20, 2013. Unit 5 commissioning activities are in full-swing and unit is expected to be commissioned in Q4 FY13. CGPL posted revenues for Q3 FY 13 of Rs798.63 crore and PAT stood at Rs829.58 crore.

Maithon Power (MPL): Revenues for Q3FY13 stood at Rs517.42 crore and PAT stood at Rs15.23 crore. The land acquisition for railway infrastructure is under progress and is expected to be completed by June 2013. Subsequent to the signing of fuel supply agreement with CCL for 1.975 MTPA of coal, supply of coal from CCL has commenced. Daily coal receipt by road has improved significantly. The average coal receipt in Q3 FY13 was around 12,641 tons per day. The highest coal receipt of total 4,99,064 MT was recorded in December 2012.

Industrial Energy (IEL): The company reported revenues for Q3 FY 13 of Rs124.15 crore, increase of 18 percent and PAT stood at Rs18.40 crore.

Tata Power Renewable Energy (TPREL): Q3 FY13 revenues stood at Rs16.71 crore and PAT was at Rs0.44 crore.

Tata Power Delhi Distribution: The company's distribution subsidiary and joint-venture with Delhi government, posted revenues of Rs1300.24 crore up 19 percent as compared to Rs1,097.12 crore in corresponding quarter last year. PAT stood at Rs76.58 crore up 252 percent as compared to Rs30.36 crore in Q3FY12.

Powerlinks Transmission (Powerlinks): Powerlinks, the first public-private joint-venture in power transmission in India reported revenues of Rs67.55 crore in Q3 FY13 as compared to Rs70.11 crore in Q3 FY12. PAT stood at Rs25.58 crore as compared Rs28.08 in Q3 FY12.

Tata Power Trading Company (TPTCL): TPTCL traded a total of 2441 MUs as compared to 1339 MUs in the corresponding period last year, resulting in revenues of Rs 997.86 crore, as compared to Rs489.83 in Q3 FY12. PAT stood at Rs7.03 crore up 176 percent as compared to Rs3.98 crore in the previous quarter last year.

Growth plans

Distribution franchise for Jamshedpur circle: Subsequent to winning the bid for distribution franchisee (DF) of Jamshedpur circle, a special purpose company (SPC), TP Power Distribution has been formed and executed the distribution franchisee agreement (DFA) with Jharkhand State Electricity Board (JSEB).

Kalinganagar, Orissa 3x67.5 MW (gas based) +3x150 MW (coal + gas based): Civil construction work and engineering has commenced and order for major equipment's has been placed for the gas-based units. Structural erection for Unit-1 boiler and preparatory works for lifting boiler drum are in progress. Structural erection for boiler Unit #2 has been commenced.

International Projects

Cennergi has been announced as a preferred bidder for the two wind projects of 234 MW - Amakhala 139 MW and Tsitsikamma 95 MW projects and is working towards achieving financial closure by March 2013.

Tata Power has signed a long term coal supply agreement with PT Antang Gunung Meratus, Indonesia, a 100 percent subsidiary of the Indonesian company PT Baramulti Sukses Sarana (“BSSR”). The company has also acquired 26 percent stake in BSSR.

114MW Dagachhu Project: is being developed in partnership with The Royal Government of Bhutan (RGoB). More than 75 percent concreting at the Intake-Weir and 85 percent concreting for the desilting chamber is completed. The excavation of emergency tunnel and tail race tunnel completed. Invert lining of connection tunnel is in progress. For head race tunnel, more than 65 percent of tunnel excavation completed. Surge shaft excavation and stabilisation also completed. Currently erection of turbine casing and hydraulic distributor in the power house is under progress. Expected commissioning is by 2014.

240MW Geothermal Project: Tata Power along with consortium partners Origin Energy and PT Supraco won 240MW Sorik Marapi Project in Indonesia. The environmental permits were received in May 2012. Land acquisition is progressing well wherein land for base camp and main access road has been acquired. Exploration work is in progress.PPA finalisation is under process and is taking more time than anticipated.

Awards and recognitions

India Power Awards 2012 confers Anil Sardana, managing director, Tata Power, with 'Leading Energy Personality' Award (power generation) and the company is also conferred 'Best Fast Track Completed Power Transmission Projects' award

Tata Power bestowed CII ITC Sustainability Award 2012 for its strong commitment to environment

Won the 'Category I: Power Generation Award-Thermal/Conventional-Special Jury Award' at the 6th Enertia Awards 2012 for 4000MW Ultra Mega Power Project in Mundra, Gujarat.