Mr Isaac George CFO of GVK Power & Infrastructure in an interview with CNBC-TV18 spoke about the results and his outlook for the company. Here is a verbatim transcript of an exclusive interview with Mr Isaac George on CNBC-TV18.
Q. Could you take us through the power division first and explain the EBIT from the power division of INR 70 crore that you have reported this time?
A - On the power front, we have two projects totaling to about 440 MW which have been operating at full load for the entire quarter. We ended with a turnover of about INR 197 crore with an EBITDA of INR 47 crore and a profit after tax of INR 3.11 crore. The results as far as the power sector is concerned, are lower than expected because we were not in a position to sell power 20% of the power on merchant basis. This was because the regulator had not given us an approval. Now that we have got an order from government of Andhra Pradesh allowing us to sell that 20% power on merchant basis, the next quarter’s performance as far as the power segment is concerned, is going to be far better than what we have reported this quarter.
Q. Even in the road segment your profitability is concerning a bit because for the Q2 the EBIT numbers on the road side have been a bit lower than analyst’s estimates?
A - The turnover was very good which was about INR 43 crore. The net profit was a notch lower at INR 13.37 crore. The primary reason for the net profit being lower was that we have started major maintenance work. Once in a week five years we have got to relay the road. So we had just started it and the impact of this quarter has been about INR 8 crore as a result of major maintenance. So that has pulled the profit down. Had the major maintenance not been there, we should have ended the year with a profit of about INR 22 crore. Overall the performance has been good but these one time expenses that keep coming for major maintenance pulls the profit down. Otherwise, on a revenue level, we have recorded 18% growth in the revenue compared to the previous year’s quarter.
Q. What kind of revenues did you book from your stake in Mumbai international airport?
A - For Mumbai international airport we ended the year with revenue of INR 245 crore versus INR 233 crore YoY. We own about 37% of Mumbai international airport. So it’s almost one third of INR 245 crore that we have as revenue from MIAL.
Q. Where do you see margins improving to? This quarter seems to be a slippage for the second half of the year. How much of a margin improvement or scale back do you see?
A - For the power sector, the margins are likely to improve substantially with merchant power sale coming in the Q3 and Q4. Road project will continue to be at the same level of profits that we are operating. MIAL, the performance has been good we reported a net profit off INR 36 crore as against INR 22 crore in the previous year. That will also be around the same number we are looking at. Power will take us to a better performance in the next two quarters.
(Sourced from CNBC TV 18)
