PFC's Jul-Sep profit down 40% on forex loss

State-run Power Finance Corp today reported 40% drop in profit after tax at Rs 419 crore for three months ended September, as significant loss related to foreign exchange hit its bottom line.

The power sector lender's board today also approved the proposal to start a $1 billion private equity fund.

The company had a profit after tax of Rs 701 crore in the year-ago period.

PFC's profitability was hit by an extraordinary item of Rs 504 crore, related to foreign exchange losses. "In the last two weeks of September, rupee appreciated about 8 to 10%, leaving us without much hedging options in that quarter," a top company official said.

The company announced its results after board meeting here.

"We have to consider extraordinary items like foreign exchange loss which you all know that due to dollar-rupee rate fluctuation in September was around 10%," PFC's CMD Satnam Singh told reporters.

On a half-yearly basis, tbe entity's profit after tax slumped 18% to Rs 1,106 crore. In the year-ago period, the same stood at Rs 1,353 crore.

During the same period, the company's total income shot up 22% to Rs 6,069 crore.

"Our outstanding sanctions stand at Rs 1,79,000 crore, which is a fairly good indication of how we are going to grow because our yearly disbursements are of the order of Rs 35,000 crore or so," Singh said.

For the PE fund, the company is looking for partner.

The company would go for a tender for selecting a partner for the PE fund.

Regarding extending loans to power distribution companies, many of which are deep in the red, Singh said, "the Power Ministry we are developing a common grading mechanism for lending to the dis-coms in future that shall be followed by both PFC, REC and all the banks".

On the issue of increasing tariff, Singh noted that the Power Ministry has taken up the same with the Appellate Tribunal for Electricity.

"(Power) Ministry had taken up the issue with appellate tribunal to ask the regulatory commissions in the states as to why they are not exercising their powers... To suo motu increase the tariff," he said.