Adani Enterprises today reported a decline of over 29% in its consolidated net profit to Rs 402.88 crore for the first
quarter ended June 30, 2012, largely due to hefty increase in finance costs and higher fuel costs incurred on the power business.
The flagship firm of the Adani Group had posted a net profit of Rs 569.81 crore in the year-ago period.
The net sales of the company rose by nearly 15% to Rs 11,024.59 crore during the quarter vis-a-vis Rs 9,596.13 crore of the first quarter
of FY'12, it said in a filing to the BSE.
During the quarter, company's finance costs increased by over four times to Rs 927.19 crore, hurting its profit significantly. It's finance cost in
April-June quarter of 2011-12 was at Rs 222.97 crore.
In a separate statement, the company attributed the fall in profit to higher fuel costs incurred by its power business.
The company said lack of domestic coal supply forced it to go for expensive imports to run the power business, managed by Adani Power, leading to higher fuel costs.
"The quarterly performance is adversely affected by power sectoral issues which are beyond our control such as short fall against linkage of domestic coal, high prices of imported coal and limited availability of transmission
line," Adani Group Chairman Gautam Adani said.
He said the company is working with concerned authorities to arrive at a solution and "are confident that our power business shall generate the
envisaged return shortly, creating value for its stakeholders."
Besides, the company is expecting to secure finances for its Australian coal venture during the year, it said, adding that environment and other
regulatory clearances will also be obtained by fiscal-end.
"We are also expecting the financial closure during this year and will start construction of mine, rail and port capacities. The operations of
overburden removal at Australian mine is expected to begin in November 2013," it said.
During the quarter, company's power arm Adani Power commissioned largest private sector high voltage direct current transmission system in the
country between Mundra in Gujarat to Mohindergarh in Haryana, it added. Moreover, its coal trading during the quarter stood at 8.8 million tonnes
in the last quarter.
"We expect the overall performance from our businesses to improve substantially as the recent investment in power, port and mining start generating returns and are fully committed in creating sustainable value for all its stakeholders," Adani Group's Chief Financial Officer Devang
Shares of the company closed today at Rs 177.85 apiece on the BSE, down 1.90% from the previous close.