Speaking to CNBC-TV18, Jayant Mhaiskar, the company‘s Vice Chairman and Managing Director, said the company had filed a claim worth Rs 42.5 crore with the National Highways Authority of India for loss of revenue.
The note ban enforced by the government in November was the primary cause for MEP Infrastructure’s flat performance in the third quarter, according to Jayant Mhaiskar, the company’s Vice Chairman and Managing Director.
Speaking to CNBC-TV18, Mhaiskar said that MEP, which operates several toll projects on national highway, bore the brunt after toll collection was suspended to ease the burden on commuters already coping with the cash crunch in the aftermath of the note ban.
In its earnings released on Monday, the company declared a net profit of Rs 0.9 crore versus a loss of Rs 9.6 crore year-on-year. However, total income was down 19.4 percent At Rs 389 crore versus Rs 482.5 crore YoY.
Mhaiskar said the company had filed a claim worth Rs 42.5 crore with the National Highways Authority of India for loss of revenue, and that the loss needed to be added to the Q3 revenue.
He said that there had been a growth in traffic on national highways since January and fourth quarter performance would be better.
Stating that the company has orders worth Rs 4,500 crore in the pipeline, he said MEP was in an active bidding phase.
Below is the verbatim transcript of Jayant Mhaiskar’s interview to Reema Tendulkar & Nigel D'Souza.
Nigel: If you could help us out with the couple of details on the traffic growth of the company for quarter three what was the traffic growth if you could tell us that and also what kind of a traffic growth are you looking at for the next fiscal FY18?
A: MEP Infrastructure has announced its quarter three results yesterday. In the quarter three predominately, we had one month of suspension of toll on account of demonetisation for the month of November. Apparently, the traffic growth post that on the national highways is picking up post January. The growth has been flattish in quarter three, however in the current quarter we are seeing a good traction in terms of the growth on particular corridors which the company is managing either at the one year tolling or at the OMT space. So the traffic growth is picking up in the current quarter as compared to the last quarter.
Reema: What was the loss in revenue due to one month suspension of toll on account of demonetisation and when will MEP get compensated by the government?
A: The company has predominately put a claim of almost Rs 42.50 crore to the authorities for claims towards the demonetisation. So, if you see the top-line to that extent has been reduced in terms of the claims receivable vis-à-vis the amount payable to the authorities. So, for the current quarter if you see the revenue of the company it stands at around Rs 406 crore in which close to Rs 42.50 crore will have to be added in the total revenue for the quarter three.
Reema: Even if we add that back it would still be a revenue decline of closed to about 10 percent right? When would you get that Rs 42.50 crore claim?
A: Basically, Rs 42.50 crore is something which is the amount adjusted towards the concession fee payable to the authority. So, actually the company will not be getting those numbers. It is a setoff against the concession fee payable vis-à-vis the loss of revenue- point one.
Point two as far as the decrease in the revenue is concerned predominantly it is on account of two-three main reasons - the company has completed the project at Kini-Tasawade and Satara-Kagal which is one of the special purpose vehicle (SPV) that the company was operating and also the company has handed over the Madurai-Kanyakumari project to the authority under the applicable specimen two. These two projects added the topline revenue growth to around Rs 50 plus crore has been already either completed or given back to the authority.
Nigel: If you could tell us what exactly is your current order book that you have on hand and also what is the pipeline looking like?
A: The current EPC order book for MEPIDL through the Hybrid annuity projects what the company has won closed to Rs 4,000 crore odd including the addition in the value on change of scope that is one. Second the company currently in a very actively bidding post financial closure of four of its six projects. The balance two projects we are expecting within next eight to ten days announcing the financial closure.
The pipeline if you ask me would be closed to around Rs 4500 crore of hybrid annuity model (HAM) bidding which the company is going to do in the next 15-30 days’ time.
For entire interview, watch accompanying video.