NTPC FY18 profit slips 2% to Rs 10,502 cr

State-owned power generator NTPC’s profit in FY18 slipped by 1.9% from last year to Rs 10,501.5 crore, notwithstanding a 7% rise in revenue to Rs 88,083 crore in the same period, as its finance costs in the fiscal went up by 21% to Rs 4,434.6 crore. The company was also affected by under-recovery of about Rs 800 crore on account of fuel shortage at several of its generating stations, underscoring the ongoing issue of coal scarcity at power plants across the country. The power company’s earnings before interest, taxes, depreciation and amortisation (Ebitda) in FY18 was Rs 23,425.8 crore, 4.7% higher than FY17.

However, the Ebitda margin slipped by 68 basis points to 26.6% in FY18, on a consolidated basis. NTPC generated 265.8 billion units of electricity in FY, registering an increase of 6.2%. Its coal-based stations achieved plant load factor of 77.9% in the fiscal, against national average of 60.7%.

Coal shortage was seen in NTPC power plants at Mauda, Solapur and Bongaigaon. Responding to post-results queries put up by analysts, the company said that the fuel shortage issue at the Mauda and Solapur plants has been addressed by the central government’s flexible utilisation of coal policy, which allows power plants of a company to swap coal allotted to each generation unit.

NTPC has approached the Central Electricity Regulatory Commission to recover the loss on this account by passing through the expenses as higher electricity tariffs. The borrowing cost borne by the company in FY18 was 6.9%, and NTPC officials said that though they expect it to increase, that will not impact the company as such costs are liable to be passed through.

The power generation behemoth said that it would take a decision on taking over stressed assets in a couple of months, adding that having power purchase agreement tied up to the full capacity of the assets, as per the ‘Maharatna guidelines’, is the determining factor behind potential takeover of the plants.

As reported by FE earlier, NTPC has received proposals for about 6,500 MW of power assets under stress after it expressed interest in taking over such units in late 2017. The 1,200-MW Derang plant of Jindal India Thermal Power; the 1,980-MW Barah plant, run by a subsidiary of Jaiprakash Power Ventures; and the 1,980-MW Lalitpur plant, operated by Lalitpur Power Generation Company, a unit of the Bajaj Group, was offered to NTPC by lenders for takeover.

Separately, JPVL also offered its 1,320-MW Nigrie plant to the largest power generator of the country. Except Lalitpur, other plants cited above are part of the 34 stressed power assets identified by the government.