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This distress call came after the company today posted a consolidated net loss of Rs 329 crore, as it made a Rs 600-crore provision for the possible losses from Mundra.
“An additional impairment provision was provided in the current quarter after review of recoverability of carrying cost from its future earnings. With this impairment, equity of CGPL (Mundra power plant) eroded substantially,” Tata Power said.
This is the second impairment charge Tata has taken due to its 4,000-megawatt power plant based on imported coal. It took an impairment of Rs 1,800 crore in the last financial year. The ultra mega power project (UMPP) became unviable after the home country of Tata's coal source, Indonesia, changed its regulations, driving up its fuel costs.
Tata is now 'eagerly' awaiting the Central Electricity Regulatory Commission (CERC)’s decision on its application to revise rates of the Mundra UMPP, to tide over these problems.
“Whereas Tata Power has commissioned its UMPP ahead of schedule and is contributing brilliantly to the national economy, it is hoped that the decision in respect of fuel prices is taken early and constant impact on Tata Power’s net worth is salvaged,” said Sardana.
The third quarter's profits were also hit by lower price realisations from its coal mines in Indonesia. Compare with that last year's net profit of Rs 298 crore, included deferred stripping costs, and a reversal of forex losses.
“The accumulating regulatory assets in Delhi and Mumbai are a matter of concern and it is important to address this. Price realisations from the Indonesian coal companies are lower due to falling coal prices in the current quarter. However, the coal prices have stabilised in recent weeks,” said Sardana.
Mundra however, contributed to Tata Power's revenues positively.
Higher generation from the plant as well as Maithon, higher fuel costs of Mumbai power distribution and power purchase costs from Delhi distribution pushed its revenues by 36 per cent to Rs 9,039 crore as compared to Rs 6,660 crore in corresponding quarter last year.
Sardana expressed happiness over this robust growth in revenues. “We are happy to announce that the company's revenues crossed the Rs 9,000 crore mark this quarter,” he said. The company's generation capacity is at around 7,700 megawatts, as is the country's largest private power producer.
