GVKPIL Q1 net loss rises nine-fold

Attributes higher loss to one-time charge of Rs 287 cr, higher financial and depreciation charges, and stoppage of gas supply to two power plants

Hyderabad-based GVK Power and Infrastructure Limited (GVKPIL) reported a nine-fold increase in net loss at Rs 281.34 crore for the quarter ended June 2014, compared with a loss of Rs 30.59 crore in the corresponding quarter previous year.

The company, however, posted a 1.9 per cent rise in total income from 699.52 crore to Rs 712.67 crore during the same period.

GVKPIL attributed the rise in loss to a one-time charge of Rs 286.78 crore, higher financial expenses, higher depreciation and stoppage of gas supply to two of its power plants.

According to the company, the one-time charge of Rs 286.78 crore was the written down value of the old terminal T2 of Mumbai International Airport Limited that had been demolished. The higher financial expenses (Rs 130.30 crore) and higher depreciation (Rs 137.17 crore) were on account of the capitalisation of the new terminal T2.

In addition, GVKPIL stated, tariff through which the company could recover these costs for the control period beginning April 1, 2014, had not been issued yet and zero revenues have been accounted based on tariff order issued for the earlier control period.

Bangalore International Airport Limited (BIAL), operated by the company, incurred a loss of Rs 30 crore during the quarter under consideration as against a profit Rs 64.97 crore in the same period last year. It attributed this loss to higher financial expenses (Rs 53.35 crore) and higher depreciation (Rs 55.62 crore) on account of the capitalisation of the expansion project (upgradation of terminal and facilities).

GVKPIL also stated that the new tariff through which it could recover costs was approved but it was effective only from July 1, 2014. Besides, there was a higher depreciation charge of Rs 31.37 crore due to changed useful life of assets as per the new Companies Act effective April 1, 2014.

This apart, the stoppage of gas supply for two of its power plants and reduced supply to one plant added to the net loss.