Infrastructure firm GVK Power and Infrastructure reported narrowing of net loss at Rs 45 crore for Q3FY14 versus a net loss of Rs 57 crore in the year-ago period. This is the ninth consecutive quarter when the company has reported loss on a consolidated basis. However, consolidated net income of the group increased over 16 percent to Rs 735 crore from Rs 649 crore in the year-ago period.
Director-Finance Isaac George told CNBC-TV18 that the company’s consolidated debt stands at Rs 21,000 crore and interest burden continues to hit its consolidated performance. Secondly, energy verticals reported losses in the range of Rs 51 crore, pulling down profitability further, he added. Non-availability of gas remains a serious concern for the company, he added.
Meanwhile, its transportation and airports businesses’ performance is in-line with estimates. GVK currently manages international airports at Mumbai and Bengaluru. GVK’s debt in Mumbai International Airport Pvt. Ltd (MIAL) currently stands at Rs 7,900 crore and reduction of MIAL debt is the key to turning PAT positive, George said. MIAL is a joint venture between the GVK led consortium (74 percent) and Airports Authority of India (26 percent). The Prime Minister recently iinaugurated GVK's new Mumbai airport T2 terminal and the company is betting big on T2 once it opens because its non-aero revenue is likely to go up.
Below is the edited transcript of Isaac George’s interview with CNBC-TV18’s Sonia Shenoy and Latha Venkatesh.
Q: Your airports have become the largest contributor to your top line. Now that the Mumbai International Airport Pvt. Ltd. (MIAL) tariff hike is factored in - is this the kind of revenue run rate we can expect going forward or can there be further upsides to this - given that you are looking to start T2 soon?
A: Once T2 opens it should be better because non-aero revenue is likely to go up, but we will have to wait for the next quarter to get the numbers properly. Certainly it will be better than these numbers.
Q: Could you tell us how has the passenger growth for MIAL and Bangalore international airport (BIAL) has been?
A: As far as Mumbai is concerned, passenger growth was about 8 percent when you compare it with the third quarter of the previous year. We handled about 8.2 million passengers during Q3 in MIAL. As far as BIAL is concerned, growth in passenger was about 9 percent. We handled about 3.32 million passengers in the current quarter of the current financial year.
Q: Could you give us an update on the land monetisation around MIAL. Have you begun that process and what are the first feelers which you are picking up from interested participants?
A: Land monetisation of about eight acres of land involving Floor Space Index (FSI) of about 1.8 million square feet. Bids have been called for that and right now we are in the last phase of negotiation with the preferred bidders. So, we will have to wait for a week or two before we come out with the actual numbers. Response has been fairly good, but we are in the process of negotiation. We will be in a position to come out with the numbers may be by the middle or end of February.
Q: We understand it is a lumpy business but your margins have been trending lower for sometime now. What is dragging them down - given that your sector performance has not worsened?
A: As far as the energy vertical is concerned, we are not operating basically because of unavailability of gas for two of our projects. Even the first project that is operating is not operating at optimum capacity; we are just operating at 55 percent capacity. For energy, on a standalone basis, loss from energy verticals was roughly in the region of about Rs 51 crore for the quarter whereas if you compare it with the consolidated numbers for the quarter, the consolidated number was Rs 45 crore. This was one of the factors energy has been pulling us down basically because of non-availability of gas.
The second aspect is the debt sitting in the airport vertical on which the interest burden is also hitting the consolidated numbers. Debt is going up to the extent of the interest that we are funding it through additional debt. There is an incremental interest that is being debited to the consolidated profit and loss account. These two are the factors that have pulled the profits at a consolidated level down but otherwise transportation performed well and airports also have performed very well. The other two verticals transportation and the airports are doing reasonably well and going further you can expect still better performance from these two verticals.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
