DVC posts Rs 19cr net profit in Q4, charts out turnaround plan

Damodar Valley Corporation (DVC) has posted a net profit of Rs 19 crore in the fourth quarter ended March 31, 2018, after 15 consecutive quarterly losses, a top company official today said.

Buoyed by the profit, the company is now aiming to post a spectacular turnaround in the current fiscal with a net profit of Rs 552 crore, DVC member-secretary and acting chairman P K Mukhopadhyay said.

"We have posted Rs 19 crore net profit in the Q4 period ended March 2018 after a gap of 15 consecutive quarters. But, overall 2017-18 loss stands at Rs 870 crore. However, we are targeting Rs 552 crore profit in the current fiscal (FY'19)," Mukhopadhyay said.

Operational efficiency, cost control, sale in power exchange and exports, power demand growth and running Raghunathpur thermal power station in full capacity would be the key drivers for the turnaround story of DVC, he said.

The company hopes to achieve around Rs 2,739 crore additional revenue over and above the Rs 15,729 crore revenue it generated in 2017-18.

Another DVC official said that structural changes introduced by former chairman Andrew W K Langstieh is now bearing fruits.

Mukhopadhyay said the company has officially terminated an MoU with Neyveli Lignite Ltd to hive off 1,200 MW Raghunathpur thermal power plant into a joint venture.

Raghunapthpur was a drag on the DVC's financials due to high interest burden of around Rs 840 crore annually.

"Raghunathpur thermal power plant will be the cheapest plant in which fixed cost will come to Rs 1.65 per unit based on Rs 9,300 crore cost. The cost is yet to be vetted by the Central Electricity Regulatory Commission," he said.

The Raghunathpur plant, which has been operating at about 400MW out of 1200 MW capacity, will start generating some 800MW from May-June and reach full load generation from early next year after a railroad connectivity is in place, Mukhopadhyay said.

DVC has also been retiring several old capacities. In 2017-18, it logged off 820 MW and by 2020, another 550 MW worth of capacity will be shed to move out of high-cost power generation.

DVC is now left with 7,090 MW of thermal and 147.2 MW hydel generation capacity and has a Plant Load Factor of 71 per cent.