HCC reports Rs 50-cr loss

Company blames disastrous economic environment & bad decision making for the company's continued streak in the red

The Hindustan Construction Company (HCC) continued to be in the red, reporting Rs 50.3 crore loss in the fourth quarter of FY13, compared to Rs 54.1 crore loss in the corresponding quarter of the previous financial year.

Ajit Gulabchand, HCC’s chairman and managing director, blamed it on “disastrous economic environment”, which affected decision making that in turn delayed realisation of payments and clearances of projects.

The company’s income plummeted to Rs 982.9 crore in the quarter under review from Rs 1,156.2 crore in the same quarter of the previous year. However, despite the dip in income, cost of raw material consumed by the company rose to Rs 379.9 crore during the January-March quarter from Rs 272.2 crore a year ago.

For the full-year, HCC’s loss stood at Rs 137.6 crore on a total income of Rs 3,837.3 crore in FY13. The consolidated loss of the company during FY13 stood at Rs 482.5 crore from a total income of Rs 8,510 crore.

“I am disappointed with our annual performance, which has resulted from operating in a disastrous economic environment made worse by fears in decision making that have delayed realisation of payments and clearances of projects. The large lock-up in claims and fall in visible order book are a major cause for concern for our industry – projects worth Rs 10 lakh crore have been stalled and we are hopeful that the finance minister’s recent efforts will restart these projects,” said Gulabchand in a statement.

He added the company would put in place prudent measures aimed at efficient project management and tight control over costs in this lean phase.

“Finally, a monetisation of assets in the coming year will accelerate the necessary deleveraging of our balance sheet.”

A company statement said the firm achieved substantial savings of Rs 78.8 crore in fixed costs and managed to increase profit from operations (before other income / finance cost / exceptional items) from Rs 111.4 crore to 215.17 crore during the year. “In spite of continuing slowdown in economy, the company on a basis has not only able to control but also reduced the loss (net of tax) to Rs 137.6 crore from Rs 222.3 crore previous year.”

During FY13, the company secured five new orders worth Rs 2,478 crore and is L1 (lowest bidder) in three projects worth Rs 2,265 crore.