Indian Stock Market Tips - NTPC Q2 net profit slips 1.1% as expenses rise amid coal shortage
The net profit of NTPC fell 1.1% year-on-year (y-o-y) to Rs 2,417.6 crore in the three months ended September 2018, as coal supply woes hit the country's largest power generator amid rising expenses.
The net profit of NTPC fell 1.1% year-on-year (y-o-y) to Rs 2,417.6 crore in the three months ended September 2018, as coal supply woes hit the country’s largest power generator amid rising expenses.
The company’s finance costs in the quarter increased 40.7% to Rs 1,294.1 crore because of rising in working capital loans. NTPC’s other expenses grew 25% to `1,997.6 crores, which the company attributed to foreign exchange fluctuations.
The power company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) in the quarter was Rs 5,962 crore, 6.6% higher than Q2FY18. The Ebitda margin, however, decreased by 140 basis points to 26.8%. There was a 12.7% y-o-y rise in quarterly revenue to Rs 22,486 crore.
Utilization levels of NTPC’s coal-based power plants also declined, with plant load factor (PLF) falling by nearly four percentage points y-o-y in the quarter to 72.6%.
NTPC’s PLF in the first six months of FY19 recorded a drop of 2.5 percentage points to 75.3%.
NTPC generated 65.9 billion units of electricity in the quarter, registering an increase of 1.5%.
“The rail-fed power stations are running hand-to-mouth,” Prakash Tiwari, director operations, said in the teleconference with analysts after the results were declared. Power plants are contractually entitled to receive fixed costs for recovering capital expenses even though when buyers do not procure electricity from the units.
However, the plants need to display a minimum plant availability factor (PAF) of 83% to claim the fixed costs. The average PAF of NTPC plants in the quarter dropped by nearly two percentage points y-o-y to 84.3% mainly due to coal shortage and planned outages for maintenance.
Maintenance activity at the 1,550 MW Unchaahar plant — where 45 people had died last year in a boiler blast — led to under-recoveries of Rs 131 crore in the quarter. The management expects the plant to be back by December 15.
Under-recovery due to coal shortage at 2,320 MW Mouda power plant, 2,000 MW Simhadri station and 2,400 MW Kudgi unit was Rs 156 crore, Rs 78 crore, and Rs 25 crore, respectively, in the first half of FY19. Total under-recovery in Q2 stood at Rs 330 crore.
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