Reliance Infrastructure has registered just a marginal 1% growth in its consolidated net sales for the quarter ended Dec 2018 to Rs 4115.72 crore. But net profit (after MI, associate profit share) of continuing business was down by 36% to Rs 75.26 crore. Considering near flat revenue growth and 410 bps fall in operating profit margin, as well as higher interest and depreciation cost, higher minority interest and share of loss from associate, the profit at bottom-line was largely due to higher regulatory income. Aided further by higher profit from discontinued business (net of tax) the net profit was up by 8% to Rs 325.26 crore. However with other comprehensive expenses stand higher at RS 33.74 crore (against a profit of Rs 6.75 crore in corresponding previous period); the total comprehensive income attributable to owners was down by 5% to Rs 291.52 crore.

• Sale for the quarter was up by 1% to Rs 4115.72 crore. But the regulatory income jumped up by 130% to Rs 359.56 crore. Thus the sale including regulatory income was up by 5% to Rs 4475.28 crore driven by growth in revenue of all business segments of the company.
• The segment revenue of power business was up by 5% to Rs 3782.39 crore (or 85% of sales) largely escalated by higher regulatory income. The segment revenue of infrastructure was up by 10% to Rs 393.98 crore (or 9% of sales). And the segment revenue of EPC was up by 6% to Rs 298.91 crore (or 7% of sales).
• EBIT was down by 2% to Rs 844.47 crore and the downside at EBIT was largely due to sharp fall in profit of EPC business. The segment profit of power business was higher by 26% to Rs 658.23 crore facilitated by higher sales as well as 300 bps expansion in segment margin to 17.4%. Sharp expansion in segment profit and margin of power business was largely due to higher regulatory income which stood higher by 130% to Rs 359.56 crore. The segment profit of Infrastructure business was up by 29% to Rs 157.18 crore aided by higher sales as well as higher margin. The segment margin of infra expanded by 590 bps to 39.9%. However the segment profit of EPC despite higher sale, was down by sharp 87% to Rs 29.06 crore with its segment margin crash by strong 6910 bps to 9.7%.
• The PBT was a profit of Rs 109.34 crore for the quarter compared to a loss of Rs 47.59 crore, with interest cost stand at Rs 735.74 crore, a fall of 3%. As tax write-back stand lower at RS 18.97 crore compared to a write-back of Rs 100.60 crore in corresponding previous period, the PAT was up by 142% to Rs 128.31 crore.
• Share of profit from associates was a loss of Rs 32.41 crore compared to a profit of RS 65.89 crore in the corresponding previous period. The minority interest was a share of profit of Rs 20.64 crore compared to mere Rs 0.48 crore of share of profit in the corresponding previous period. Thus the net profit before profit from discontinued operations was down by 36% to Rs 75.26 crore.
• The profit from discontinued operations (net of tax) was up by 37% to Rs 250 crore and thus the net profit was up by 8% to Rs 325.26 crore.
• The other comprehensive Income/expense was an expense of Rs 33.74 crore (compared to an income of Rs 6.75 crore in Q3FY18). And thus the total comprehensive income was eventually lower by 5% to Rs 291.52 crore.

Pursuant to the Share Purchase Agreement entered with Adani Transmission Limited (ATL) for the sale of Mumbai Power Business (MPB), the Parent Company on August 29, 2018 divested its entire stake in its wholly owned subsidiary viz Reliance Energy Generation and Supply (REGSL). The results of the MPB are classified as Discontinued Operations as per lnd AS 105 Non Current Assets held for sale and discontinued operations.

Pursuant to the Scheme of Amalgamation of Reliance Infraprojects with RInfra, sanctioned by the Hon'ble High Court of Judicature at Bombay on March 30, 2011, net foreign exchange loss of Rs 89.55 crore and a gain of Rs 93.26 crore for the quarter and nine month ended December 2018 has been credited to the Consolidated Statement of Profit and Loss and an equivalent amount has been transferred to General Reserve. Had such transfer not been done, the Consolidated Profit before tax for the quarter and 9m period ended December 2018 would have been lower/higher by Rs 61.77 crore and Rs 93.26 crore respectively and General Reserve would have been lower by Rs 93.26 crore. The treatment prescribed under the Scheme overrides the relevant provisions of Ind AS 1 Presentation of Financial Statements.

The dispute between Delhi Airport Metro Express Private (DAMEPL) and Delhi Metro Rail Corporation (DMRC) was referred to arbitration tribunal, which vide its order dated May 11, 2017, granted arbitration award in favour of DAMEPL of Rs 4,662.59 crore on the date of the Award. DMRC challenged the Arbitration award before the single judge of Hon'ble Delhi High Court the Single Judge of Hon'ble Delhi High Court vides its order dated March 06, 2018 upheld the arbitration award and directed DMRC to keep the loan accounts of DAMEPL standard. DMRC preferred an appeal against the order of the single judge before the Division Bench of the Hon'ble Delhi High Court. However it has been set aside by the Division Bench vide its Judgment dated January 15, 2019. DAMEPL has filed special leave petition before the Supreme Court against the said judgment of Division Bench of Hon'ble Delhi High Court. Based on facts of the case and the prevalent legal position, DAMEPL has a fair chance of succeeding in the Supreme Court. During the quarter ended Dec 2018 an amount of Rs 28.30 crore has been accounted as income by DAMEPL.

 Nine month performance

Consolidated sales including regulatory income was up by 2% to Rs 14875.00 crore and that with OPM decline by 190 bps to 19.4%, the operating profit was down by 7% to Rs 2881.81 crore. After accounting for higher other income, lower interest and depreciation, the PBT (before EO) was a profit of Rs 869.86 crore compared to a loss of Rs 150.04 crore in the corresponding previous period. The EO expense jumped to Rs 4200.00 crore (compared to an income of Rs 295.39 crore in corresponding previous period) and thus it was a loss of Rs 3330.17 crore at PBT level compared to a profit of Rs 145.35 crore in the corresponding previous period.

Taxation write back was higher by 50% to Rs 240.75 crore and thus it was a loss of Rs 3089.42 crore at PAT level compared to a profit of Rs 305.56 crore in the corresponding previous period.

Share of loss from associates was Rs 40.16 crore compared to a profit of Rs 161.18 crore in corresponding previous period. Minority interest was share of profit of Rs 37.63crore compared to a share of loss of Rs 31.66 in the corresponding previous period. Thus the net profit before profit of discontinued business was a loss of Rs 3167.21 crore compared to a profit of Rs 498.40 crore in the corresponding previous period. The profit from discontinued business was up by 493% to Rs 4041.39 crore and thus at net profit level it was a profit of Rs 874.18 crore, a fall of 26%.

Other comprehensive income was Rs 63.58 crore compared to an expense of Rs 21.14 crore in the corresponding previous period. Thus the total comprehensive income was down by 19% to Rs 937.76 crore.

Other developments

EPC order book as end of Dec 31, 2018 was Rs 27800 crore flat compared to Rs 27800 crore as end of Sep 30, 2018.

The company has regulatory assets under approval and various arbitration awards won/advanced stages worth Rs 11000 crore.

The company will be zero debt in next financial year.

Reliance Infrastructure: Consolidated Result

Reliance Infrastructure: Consolidated Segment Results