Infrastructure major Hindustan Construction Company (HCC) today posted 42.8 per cent decline in standalone net profit at Rs 23.08 crore for the quarter ended September 30 on lower income from operations.
It had posted net profit from ordinary activities after tax of Rs 40.35 crore in the same quarter of the previous fiscal, HCC said in a filing to BSE.
Its total income from operations during the July-August quarter declined to Rs 911.13 crore, over Rs 961.79 crore in the year-ago period.
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The company said in a statement that overcoming the challenges of heavy monsoon this year along with disruptions in Jammu and Kashmir where some large projects are getting executed, HCC registered a net profit of Rs 23 crore in the the second quarter of FY'17, compared to Rs 10.9 crore in first quarter of 2016-17.
"The turnover is at Rs 911.1 crore compared to Rs 982.4 crore, in the previous quarter," the statement said.
HCC's order backlog, with an improved market share has grown over 30 per cent in last one year to Rs 21,309 crore in view of the government's renewed thrust on infrastructure, it said.
The company has received three major contracts in the second quarter worth Rs 4,455 crore and one order post September 30, 2016 worth Rs 202 crore. Besides, it is the lowest bidder in contracts worth Rs 3,014 crore.
Farakka Raiganj Highways, HCC's largest BOT project has started toll collection in October 2016, it said.
HCC said the Cabinet Committee on Economic Affairs'
(CCEA) decision to pay 75 per cent of the arbitral award amount will result in HCC's debt being reduced by half.
HCC has arbitration awards for Rs 3,427 crore as of September 30, 2016. Further claims worth around Rs 4,173 crore are in arbitration process.
About 70 per cent of these cases were at the initial stage of arbitration process and the company has already given consent to transfer these cases under new arbitration act. As such, we expect to get these additional awards within next 12 months duration.
"HCC's robust order-book across key sectors, along with sustained efforts to improve operational efficiencies and cost rationalisation has given us a competitive edge to withstand the challenging economic environment.
"The Cabinet Committee's path breaking decision to honour arbitration awards by releasing 75 per cent payment will result in material debt reduction by the Company," Group CFO Praveen Sood was quoted as saying in the statement.
"Post the CCEA decision, the Company has further received arbitration awards which indicates that cash flows from awards are not a one-time affair, but will continue until HCC is completely deleveraged. With improved business sentiment and order booking, we expect to enhance turnover in the coming quarters," Sood said.
"The S4A draft proposal as approved by the Joint Lender's Forum has been submitted to the overseeing committee on September 17, 2016 which is currently pending for approval," the statement said.
