Lanco's annual loss narrows by 10.4% to Rs 2,037 cr

Company says proceeds from divestments will help pare consolidated debt and infuse equity for under construction projects

Lanco decreased its annual loss for 2014-15 by 10.4 per cent to Rs 2,036.7 crore by divesting its stake in core projects. The gross revenue of the company before elimination declined 11 per cent year-on-year to Rs 9,681.4 crore in FY15 from Rs 10875.3 crore in FY14.

At an enterprise value of Rs 6,300 crore, Lanco recently concluded one of the biggest power sector transactions by divesting 100 per cent stake in its 1,200-Mw Udupi thermal power project.

“In line with our commitment, the proceeds will help reduce company’s consolidated debt position and infuse required equity for the under construction projects,” a company statement said.

Lanco also sold its 70-Mw Budhil project during FY15. Adjusted net worth of the company stood at Rs 2,364.3 crore as on March 31, 2015 and the company’s EPC order book stood at Rs 28,063 crore.

Lanco’s Kondapalli Gas fired project (1,108 Mw) has been among the successful bidders in the gas pooling bids called by the government for FY 16 & FY 17. During the first phase of the scheme, for four months starting June 2015, Kondapalli will receive Power System Development Fund support to the extent of Rs 1.42 a unit while operating at 35 per cent PLF.

Based on securing cost overrun approvals and expediting project execution schedules, Lanco is confident of executing most of the order book over the next three years.

“This will significantly help in increasing the company’s standalone EPC and construction revenues. The company is also making continued efforts to secure new EPC orders from various external clients,” said Lanco.