GMR net drops on forex losses

GMR Infrastructure, an infrastructure firm with interests in airports, energy, highways and urban infrastructure, said group profit fell 6 per cent because of foreign exchange losses.

The Bangalore-based company’s profit dropped to Rs 46.58 crore in the three months ended September 30 compared to Rs 49.58 crore in the corresponding quarter last year.

Profit in the quarter fell mainly due to notional foreign exchange losses of Rs 58.94 crore on loans taken by two of the companies’ subsidiaries.

These two subsidiaries namely, Vemagiri Power Generation (VPGL) and GMR Hyderabad International Airport (GHIAL), have adequate dollar revenues to provide natural hedge for the currency fluctuations that may arise with respect to interest and principal payments/repayments, the company said in a statement.

The consolidated net revenue for the quarter more than doubled to Rs 846.81 crore helped by business of Hyderabad airport and Turkey airport.

The Hyderabad airport started collecting a user development fee from August 2008, which is allowed for new airports while its power plants recorded higher capacity utilisation. GMR also commissioned the cargo terminal at the Sabiha Gokcen International Airport (SGIA), Turkey, which it is re-building and will have a new passenger terminal by October 2009.

Operating profit of the group gained 58.72 per cent to Rs 247.14 crore for the quarter.

GMR is trying to respond to the financial turmoil by “directing its investments on projects with immediate cash flow potential, improving efficiencies, ‘value for money’ initiatives and monetising non-core investments,’’ said group chairman GM Rao.

The group could achieve financial closure for the acquisition of 50 per cent equity stake in Intergen NV, a global Energy Major with operational capacities of 8,086 Mw and developmental capacities of more than 4,600 Mw. It also renegotiate the acquisition price for Intergen NV and thus reduced the acquisition costs by $162 million, on the earlier cost of $954 million, the company said in the statement.