JSW Energy net dips 36% on forex loss

This is because of the Rs 167.5 crore forex hit which the company had to take for importing coal

JSW Energy on Saturday reported a second quarter net profit of Rs 162.5 crore, a drop of 36 per cent from Rs 254 crore in the same quarter last year. The company attributed this to the Rs 167.5 crore forex hit it had to take for the import of coal.

The forex loss had nullified a possible gain that the company could have made from lower fuel cost. “During the quarter, steep depreciation of the rupee adversely impacted imported coal costs despite correction in the global coal indices. With the prices firming up in the global markets, the fuel costs are expected to increase at current exchange rates,” the company said.

JSW Energy's revenues too went down marginally by 2.5 per cent to Rs 2,024 crore as compared to Rs 2,076.5 crore in the corresponding quarter.

Apart from lower power demand due to monsoons, the company also took a planned maintenance shutdown for two of its units in Vijayanagar plant for 35 days. The company's average realisations from power sales however were at Rs 4.6 per unit. Its average realisations for merchant power or short-term sales is at Rs 5.2 per unit.

“But the outlook for merchant power is not very good. There is a general drop in power consumption because of industrial backdown and economic sentiment,” said Sagar. The forthcoming Union elections too might help increase the demand for electricity and state power distribution utilities have become weary of buying power under political pressure, due to their latest fiscal discipline measures that they are undertaking.

JSW Energy has also been on the lookout for distressed power generating assets that are up for sale. The company says that while it has been selective in considering assets to buy, as most distressed are in trouble themselves. “Such projects are in trouble themselves. We do not want to buy into their problems. But, we hope to bag a project next financial year,” said Sagar.