Tata Power Company (Tata Power) reported 67% fall in consolidated PAT (before MI & OCI) for the quarter ended December 2018 to Rs 204.61 crore even while the sales for the quarter was up by 21% to Rs 7706.71 crore and the operating profit up by 35% to Rs 1601.70 crore facilitated by higher sales and 210 bps expansion in OPM to 20.8%. The fall at PAT (before MI & OCI), despite strong operating performance, was largely due to lower other income (down 84% to Rs 14.81 crore), Rs 281.86 crore swing in regulatory expense to Rs 136.01 crore, 45% fall in share of profit from associate to Rs 252.62 crore and lower tax write-back.

• Sale was higher by 21% to Rs 7706.71 crore. With regulatory income being an expense of Rs 136.01 crore compared to an income of Rs 145.85 crore, the sales adjusted for regulatory income was up by 16% to Rs 7570.70 crore and the growth at operating profit (on RI adjusted sales) was restricted at 10% to Rs 1465.69 crore as OPM contract by 110 bps to 19.4%.

• After accounting for lower other income, interest and depreciation the PBT (after RI but before EO & share of profit from associate) was a loss of Rs 136.20 crore compared to a loss of Rs 14.55 crore in the corresponding previous period.

• The share of profit from associate was down by 45% to Rs 252.62 crore. And thus on higher base, the PBT (after share of associate profit/loss but before EO) returned to a profit of Rs 116.42 crore, a fall of 74%. EO income for the quarter was nil compared to an income of Rs 6.09 crore in the corresponding previous period. Thus the PBT after EO was down by 74% to Rs 116.42 crore.

• The tax write back was down by 25% to Rs 122.18 crore and thus the PAT was lower by 61% to Rs 238.60 crore.

• Loss of discontinue business was Rs 33.99 crore compared to a profit of Rs 15.91 crore in the corresponding previous period. Thus the PAT before MI was down by 67% to Rs 204.61 crore. Sharp fall in PAT before MI was due to lower profits from coal business and higher loss at Mundra power plant. The coal mines profits were affected due to the Domestic Market Obligations requirements. Higher Mundra losses due to fuel under-recovery which the company try to address by cost reduction through higher blending of Low CV coal.

• The minority interest/non controlling interest more than doubled (up 109%) to Rs 77.93 crore. Thus the net profit after MI was down by 79% to Rs 126.68 crore. The other comprehensive expenses was up by 107% to Rs 295.54 crore and thus the total comprehensive income attributable to owners was an loss of Rs 168.86 crore compared to a profit of Rs 448.08 crore in the corresponding previous period.

 Nine month performance

Sales was higher by 14% to Rs 22328.40 crore but the operating profit was up by just 3% to Rs 5074.04 crore with OPM decline by 230 bps to 22.7%.

The sales adjusted for RI was up by 14% to Rs 21919.16 crore and the operating profit was up by 3% to Rs 4664.80 crore with OPM contract by 230 bps to 21.3%. After accounting for OI, inters and depreciation, the PBT after RI but before EO & share of associate profit was down by 93% to Rs 22.96 crore.

The share of profit from associate was down by 17% to Rs 1054.33 crore and thus the PBT before EO was down by 33% to Rs 1077.29 crore. Spurred by higher EO income at Rs 1897.24 crore compared to an expense of Rs 142.71 crore in corresponding previous period, the PBT after EO was up by 103% to Rs 2974.53 crore.

With taxation stand higher by 107% to Rs 540.87 crore, the PAT was up at Rs 2433.66 crore, a jump of 102%. After accounting for Rs 141.75 crore swings in loss on discontinued business to Rs 100.57 crore, the PAT before minority interest was up by 87% to Rs 2333.09 crore. The minority interest was up by 55% to Rs 199.73 crore and other comprehensive income was higher at Rs 277.55 crore ( a swing of Rs 665.66 crore from a loss of Rs 388.11 crore in corresponding previous period) the total comprehensive income attributable to owners was up by 230% to Rs 2410.91 crore.

Management Comment

Commenting on the Company's performance, Praveer Sinha, CEO & Managing Director, Tata Power said, All our businesses continue to perform well. Our renewable business has added 356 MW over previous year and has a healthy order book of 1255 MW. The Trombay PPA with BEST has received an extension for 5 years and through the Resurgent platform taken up 1980 MW Prayagraj power plant in U.P. We have also launched residential solar rooftops in several cities now such as Mumbai, Delhi, Ajmer, Bhubaneshwar and Bangalore. PAT is adversely affected due to coal companies profitability that is under pressure due to domestic market pricing obligation and increase in fuel prices. With regard to CGPL, we are in discussion with various state governments and state discoms and are expecting a resolution for it soon. The proposal will then be submitted to CERC.

Tata Power Company: Consolidated Results