OREANDA-NEWS. Delay in Mundra tariff revision continues to severely impact profits and net worth.

Also concerned about accumulated regulatory assets of Rs7,000 crore.

Signs agreement to exit its stake in Arutmin coal mine to address cash-flow challenges.

Tata Power group's Q3 consolidated PAT improved to Rs (74.91) crore as compared to Rs (328.92) crore despite provisions relating to exceptional expenditures towards settlement of mining rates, mine rehabilitation costs, forex losses and tax demands in Arutmin coal mines. Q3 consolidated revenues stood at Rs8,700.02 crore.

Nine months consolidated profit from operation up by 23 percent at Rs3,879.53 crore. Nine months consolidated PAT improves to Rs (114.64) crore. Previous year had an impairment provision of Rs850 crore. Nine months consolidated revenues up by 12 percent at Rs26,804.20 crore.

Q3 standalone profit from operation up by 27 percent at Rs563.41 crore. Q3 standalone PAT up by 16 percent at Rs251.13 crore mainly due to favourable ATE order in Mumbai licence area. Q3 standalone revenue stood at Rs2,007.92 crore.

Nine months standalone profit from operation up by 57 percent at Rs1,632.99 crore. Nine months standalone PAT up by 5 percent at Rs869.90 crore. Nine months standalone revenues stood at Rs6,814.95 crore.

Editorial synopsis

Key financial highlights: Consolidated Q3 FY14 vs Q3 FY13

Consolidated revenue stood at Rs8,700.02 crore as compared to Rs9,039.11 crore.

Operating profit stood at Rs1,120.95 crore as compared to Rs1,268.93 crore.

Consolidated PAT improved to Rs (74.91) crore as compared to Rs (328.92) crore.

Key financial highlights: Consolidated YTD FY14 vs YTD FY13

Consolidated revenue up by 12 percent at Rs26,804.20 crore as compared to Rs23,992.97 crore.

Profit from operation up by 23 percent at Rs3,879.53 crore as compared to Rs3,145.82 crore.

Consolidated PAT up at Rs (114.64) crore as compared to Rs (266.79) crore.

Key financial highlights: Standalone Q3 FY14 vs Q3 FY13

Standalone revenue stood at Rs2,007.92 crore as compared to Rs2,549.11 crore.

Profit from operation up by 27 percent at Rs563.41 crore as compared to Rs441.94 crore.

Standalone PAT up by 16 percent at Rs251.13 crore as compared to Rs216.38 crore.

Key financial highlights: Standalone YTD FY14 vs YTD FY13

Standalone revenue stood at Rs6,814.95 crore as compared to Rs7,353.01 crore.

Profit from operation up by 57 percent at Rs1,632.99 crore as compared to Rs1,038.02 crore.

Standalone PAT up by 5 percent at Rs869.90 crore as compared to Rs824.66 crore.

Key business and growth highlights

Tata Power exits its stake in Arutmin coal and retains KPC mine.

Georgian Prime Minister Bidzina Ivanishvili performs ground-breaking ceremony at Tata Power's 400MW Hydropower Project.

Tata Power signs a memorandum of understanding (MoU) with the Government of Vietnam to develop Long Phu 2 Power Project.

Tata Power honoured by the Central Electricity Authority, Ministry of Power in New Delhi on its meritorious performance in generation and distribution and for early completion of Unit 5 of Mundra UMPP.

Tata Power conferred with the CII ITC Sustainability Award 2013 for sustainable development.

Tata Power signs a MoU with Energy Efficiency Services (EESL) for energy conservation.

Tata Power wins four awards at the 53rd Association of Business Communicators Awards Nite 2013, held at Mumbai.

Mumbai: Tata Power, one of India's largest integrated power companies, announced its results today for the quarter ended December 31, 2013.

Performance highlights Q3 FY14: Consolidated

On consolidated basis, Tata Power's Q3 FY14 revenues were down by 4 percent to Rs8,700.02 crore as compared to Rs9039.31 crore in the corresponding quarter last year driven by lower fuel and power-purchase cost in Mumbai operations and TPDDL, which is offset by the increase in revenue in Mundra and Maithon plants due to full operation and higher sales in Tata Power Solar Systems.

Profit from operations stood at Rs1,120.95 crore as compared to Rs1,268.93 crore in Q3 FY14. Profits for the quarter were impacted by lower realisation of coal prices, provisions relating to settlement of mining rates, mine rehabilitation costs and tax demands in Arutmin coal mines.

Q3 FY14 PAT was at Rs (74.91) crore as compared to Rs (328.92) crore in the corresponding quarter last year. PAT for the current quarter has been impacted by exceptional expenditures accounted in Arutmin coal mines. Previous year PAT, included provision for impairment of Rs600 crore in Mundra.

On a consolidated segment-wise performance for the quarter, revenues from the power business was down by 8 percent at Rs5,962.78 crore as compared to Rs6,462.53 crore in the corresponding quarter last year, mainly due to lower fuel prices and power-purchase costs. Revenue from coal business was marginally up at Rs2,567.55 crore as compared to Rs2,476.85 crore in Q3 FY13. PBIT from power business was up at Rs1,043.78 crore as against Rs844.81 crore in the corresponding quarter last year, due to continuing strong operational performance and regulatory orders in Mumbai operations and better capacity utilisation at the Maithon plant.

During the quarter, price realisations and margins were lower from coal business due to continuing depressed international coal prices in addition to certain one-time provisions at Arutmin mines. Consequently, PBIT from coal business stood at Rs16.89 crore as compared to Rs444.49 crore reported in the corresponding quarter.

Performance highlights Q3 FY14: Standalone

During the quarter, Tata Power's results reflected a strong financial and operational performance.

Standalone revenue stood at Rs2,007.92 crore, down 21 percent as against Rs2,549.11 crore in Q3 FY13 mainly due to lower fuel cost in the Mumbai licensed area.

Profit from operation was up by 27 percent at Rs563.41 crore as compared to Rs441.94 crore in the corresponding period last year mainly due to favourable ATE order in the Mumbai license area.

PAT up by 16 percent at Rs251.13 crore mainly due to favourable ATE order in the Mumbai license area.

Performance highlights nine months FY14: Consolidated

On the consolidated basis, Tata Power's revenues increased by 12 percent to Rs26,804.20 crore as compared to Rs23,992.97 crore in the corresponding period last year mainly due to full operations of the Mundra plant.

Profit from operation was up by 23 percent at Rs3,879.53 crore as compared to Rs3,145.82 crore in the corresponding period last year, driven by full operations at Mundra and Maithon and favourable regulatory orders for Mumbai operations. This was despite lower coal mining profits.

PAT has shown an improvement over the previous year at Rs (114.64) crore as compared to the previous year loss of Rs (266.79) crore. The previous year had impairment provision of Rs850 crore. However, the current year also has higher Forex losses and exceptional provisions at the coal mines.

On consolidated segment-wise performance, revenues from power business was up by 14 percent to Rs19,285.27 crore as compared to Rs16,851.02 crore in the corresponding period last year and coal business reported increase at Rs7,279.00 crore as compared to Rs6,795.52 crore in the corresponding period last year. PBIT from power business was up at Rs2,951.97 crore as against Rs1,974.99 crore and PBIT from coal business stood at Rs592.61 crore as compared to Rs1,125.39 crore reported in the corresponding period last year.

Performance highlights nine months FY14: Standalone

Standalone revenue down to Rs6,814.95 crore, down 7 percent as against Rs7,353.01 crore in the corresponding period last year mainly due to lower fuel costs.

Profit from operation up at Rs1,632.99 crore up by 57 percent mainly due to continuing strong operational performance and favourable regulatory orders in the Mumbai license area.

PAT is up by 5 percent at Rs869.90 crore as compared to Rs824.66 crore in the corresponding period last year.

Commenting on the company's performance, Anil Sardana, managing director, Tata Power, said, “During the quarter, the company continued its strong operational performance by all our businesses. All our projects and subsidiaries continue to perform well despite very challenging circumstances.

“In the international space, we have signed a memorandum of understanding (MoU) with the Government of Vietnam to develop Long Phu 2 Power Project, a thermal power plant, which will utilise imported coal. Our Georgia hydro project is progressing well. While, the company has commissioned its UMPP ahead of schedule and is contributing to the national economy, it is hoped that the much-awaited decision in respect of tariff is taken early to ensure viability of the project and the consequent impact on Tata Power's net worth. Keeping the under-recovery challenges in Mundra UMPP operations and cash-flow concerns in mind, we have also signed an agreement to exit from PT Arutmin Indonesia to get additional cash flow and to reduce our consolidated debt. We do not expect any impact on the coal supplies to our plants since we stay invested in KPC mines and our coal supply agreement continues as it is.

“We are also concerned about the growing regulatory assets which has reached staggering figures of Rs7,000 crore and needs to be discussed for early dilution.

“On the distribution front, we continue to offer Mumbai consumers one of the lowest tariffs in the country. We are committed to offer Mumbaikars and other cities under our purview with reliable and uninterrupted power supply at competitive prices in the years to come.”

Operational highlights

During the quarter under review, the company continued its robust operations and performed well. Sales volume for the quarter stood at 3,547MUs as compared to 3,998MUs in Q3 FY13. The overall generation was 3,212MUs as compared to 3,873MUs reported in the corresponding quarter last year. Trombay Thermal Power Station generated 1,796MUs as compared to 2,400MUs in the corresponding quarter last year. Hydro power stations generated 387MUs as compared to 341MUs. Jojobera Thermal Power Station generated 685MUs as compared to 784MUs and Haldia reported generation of 246MUs as compared to 239MUs in the corresponding quarter last year. Industrial Energy reported generation of 363MUs as compared to 383MUs. Wind farms generated 96MUs as compared to 99MUs in the corresponding quarter last year.

Business highlights: Key subsidiaries

Coastal Gujarat Power (CGPL): CGPL, the SPV which operates the 4,000MW Mundra UMPP, is fully operational now. The company posted revenues of Rs1,310.64 crore as compared to Rs802.09 crore in Q3 FY13, a jump of 63 percent on account of full operations of 5 units. PAT stood at Rs (317.83) crore as compared to Rs (829.19) crore.

Maithon Power (MPL): The 74:26 joint venture between Tata Power and Damodar Valley Corporation reported a revenue of Rs640.22 crore, up by 24 percent. PAT stood at Rs38.44 crore as compared to Rs (15.13) crore in Q3 FY13.

Industrial Energy (IEL): The company reported revenues of Rs111.68 crore, down by 10 percent and PAT of Rs21.56 crore, up by 17 percent as compared to the same quarter last year.

Tata Power Renewable Energy (TPREL): Q3 FY14 revenues stood at Rs26.65 crore, up by 59 percent and PAT was at Rs4.38 crore, as compared to Rs0.44 crore in Q3 FY13.

Tata Power Delhi Distribution: The company's distribution subsidiary and joint venture with the Delhi Government posted revenues of Rs1,484.12 crore as compared to Rs1,300.24 crore in the corresponding quarter last year. PAT was up by 13 percent at Rs86.49 crore as compared to Rs76.58 crore in Q3 FY13. The recoverable regulatory assets stood at Rs4,938 crore.

Powerlinks Transmission (Powerlinks): Powerlinks, the first public-private joint venture in power transmission in India, reported revenues of Rs63.55 crore in Q3 FY14 as compared to Rs67.55 crore in Q3 FY13. PAT stood at Rs28.20 crore, as compared to Rs25.58 in Q3 FY13.

Tata Power Trading Company (TPTCL): TPTCL traded 2,534MUs as compared to 2,441MUs in the corresponding period last year, resulting in revenues of Rs940.10 crore as compared to Rs997.86 crore in Q3 FY13. PAT stood at Rs7.22 crore as compared to Rs7.02 crore in Q3 FY13.

Growth plans

Kalinganagar, Odisha CPP 1 - 202.5MW: The project is being executed through Industrial Energy, a JV of the company with Tata Steel. EPC contract has been awarded; all clearances for the project are in place. The project is in an advanced stage of execution. Hydro test for Unit 1 boiler has been completed. Erection of all pressure parts for Unit 2 boiler has also been completed and the same is in progress for Unit 3 boiler. Erection of Unit 1 turbine and generator has been completed. Erection of Unit 1 condenser is in progress. DCS was powered on for Unit 1.

Dugar Hydroelectric JV Project: The pre-feasibility has been completed by the consortium team. The site investigations and development of the detailed project report is under progress by the joint project team set by the company and SN Power.

Coastal Maharashtra Project, 1600MW: All statutory clearances required to start the project implementation are in place. The project is in advanced stages of land acquisition. The PPA is being pursued and 30 percent domestic coal linkage as per policy is also being awaited.

Tiruldih Power Project, Jharkhand, 1980MW: The process of land acquisition for the project has made significant progress. The land acquisition process is in an advanced stage. Various survey studies like hydrology survey for water intake point finalisation, river-high flood-level survey for finalising plant boundary, hydro-geology survey for rain water / ground-water harvesting and satellite imagery have been completed.

Naraj Marthapur Project, Odisha, 660MW: The clearance from the National Board of Wildlife, which has not been met for the last two years, is awaited. With a view to expedite end use plant for Mandakini captive coal, the company is pursuing alternative land as well as suitable disposal of the existing site.

International projects

Cennergi - Tsitsikamma and Amakhala projects: The company's joint venture in South Africa, Cennergi, has made steady progress and has achieved financial closure for the above referred two wind projects.

Dagachhu Project, 126MW: This project is being developed in partnership with the Royal Government of Bhutan. The civil works are progressing as planned and 99 percent concreting has been completed. Tunnel excavation and tunnel lining is in progress. Slope stabilisation and the concreting works for the headrace channel are in progress. Fish ladder is being constructed. Seventy five percent of turbine erection has been completed and overall 65 percent electro-mechanical erection has been completed. The project is being pursued to be commissioned around May 2014, before monsoon.

Hydro Projects, Georgia: The company has announced the start of construction of the first phase of 185MW Shuakhevi Hydropower Project in Georgia being implemented through a JV with Clean Energy Invest AS (Clean Energy) and IFC InfraVentures for developing hydro projects in Georgia, for sale of power primarily to Turkey. During the quarter, a ground-breaking ceremony for construction of the first phase of 185MW Shuakhevi Hydropower Project was held. Mr Ivanishvili, was the guest of honour at the function, along with his key ministers and officials.

Renewable energy projects - Wind power: The company is one of the leading wind power utilities in the country with an installed capacity of 398MW. TPREL, a 100 percent subsidiary of Tata Power, India's largest integrated power company, signed an SPA for acquisition of 100 percent shareholding in AES Saurashtra Wind farms, a 100 percent subsidiary of AES Corporation for acquisition of 39.2MW wind farm in Gujarat.

Solar power: The company's existing solar capacity is 28+MW and it is in the process of acquiring land in the states of Maharashtra, Rajasthan, Gujarat and Karnataka to develop solar projects. The company is also developing a 28.8MW solar-photovoltaic power plant in Maharashtra to meet its solar renewable purchase obligations.