Power Finance Corporation's Q4 net profit jumps over two-and-a-half times to Rs 2,117 cr
State-owned Power Finance Corporation's (PFC) standalone net profit has risen over two-and-a-half times to Rs 2,117.56 crore in the March quarter, mainly due to higher revenues
In the full financial year 2018-19, PFC's standalone net profit stood at Rs 6,952.92 crore, compared to Rs 4,386.76 crore a year ago
Total standalone income also improved to Rs 28,851.29 crore during the year, against Rs 25,980.25 crore in 2017-18
The company's consolidated net profit in 2018-19 was Rs 12,640.27 crore at the end of 2018-19, compared with Rs 8,796.69 crore in the previous fiscal
New Delhi: State-owned Power Finance Corporation (PFC) on Wednesday reported over the twofold rise in its standalone net profit to Rs 2,117.56 crore for the March 2019 quarter, mainly on the back of reduction in the cost of funds and retiring of high-cost loans.
The company had reported a net profit of Rs 796.35 crore in the corresponding quarter of the previous fiscal.
Its total standalone income for the January-March period increased to Rs 7,702.64 crore, compared to Rs 6,254.96 crore a year ago.
During the quarter, PFC's total expenses stood at Rs 4,786.64 crore from Rs 5,186.48 crore in the fourth quarter of 2017-18, a reduction of around 7.7 percent.
In the full financial year 2018-19, PFC's standalone net profit stood at Rs 6,952.92 crore, compared to Rs 4,386.76 crore a year ago. Total standalone income also improved to Rs 28,851.29 crore during the year, against Rs 25,980.25 crore in 2017-18.
The company's consolidated net profit in 2018-19 was Rs 12,640.27 crore, compared with Rs 8,796.69 crore in the previous fiscal. Total consolidated income rose to Rs 54,156.83 crore from Rs 48,645.42 crore in 2017-18.
"During the quarter, we managed to reduce the cost of funds to 7.68 percent. This is a significant accomplishment for PFC considering the market scenario NBFCs faced during the last financial year and higher quantum raised during the year.
This has been achieved by maintaining a diversified liability mix and retiring of old high-cost loans," it's Chairman and Managing Director Rajeev Sharma told reporters here.
During the quarter, PFC completed the acquisition of state-owned REC. Thus, the firm's consolidated loan asset book after the acquisition stood at Rs 5,95,877 crore, while the net worth is Rs 63,484 crore.
PFC's loan asset book on the standalone basis crossed the Rs 3-lakh mark. The loan asset book grew at a steady rate of 13 percent, Sharma said.
Speaking about the impact of the resolution process, Sharma said it has started reflecting in the financial performance of the company.
During the quarter, GVK Ratle, where PFC had an exposure of Rs 800 crore, has been upgraded as a standard asset from the non-performing asset (NPA) category. The borrower has been servicing its dues for the past one year.
"We are also expecting 100 percent recovery for Dans Energy, Shiga Energy and Essar Transmission with aggregate exposure of Rs 1,400 crore and provisioning of 11 percent.
"For GMR Chhattisgarh, approval of all 17 lenders has been received on Adani's bid proposal and we are expecting nearly 50 percent recovery as against the existing provision of 51 percent," he said.
Sharma further said that after the Supreme Court order striking down the RBI's February 12, 2018, circular, NCLT petitions for three projects, where PFC was one of the lenders, have been withdrawn.
PFC had Rs 8,000-crore exposure in these projects namely Rattan India Amravati, Rattan India Nasik and KSK Mahanadi.
"However, for KSK Mahanadi, lenders have decided to move to NCLT again. Adani had bid the highest for this project, but then it withdrew its bid. So, the lenders deliberated on it and decided to approach the NCLT again," Sharma said adding the lenders are trying to minimise the haircut further.
In Rattan India Nasik, the Maharashtra Electricity Regulatory Commission had given approval for operationalising 507-MW power purchase agreement (PPA) with Maharashtra discom. Resolution plan will be finalised after operationalisation of PPA.
He further said that going forward, PFC would continue with its efforts to diversify the loan book to sectors such as electrical and hydro-mechanical components related to lift irrigation, sewage treatment plants, smart cities, and e-vehicle manufacturing units including charging stations, among others.
The state-run lender for the power sector has already started the sale process for tax-saving infrastructure bonds and tax-free bonds, which together could raise up to Rs 11,900 crore.
What industry experts really fear is the actual financial status of these boards. Nearly half the boards do not have an auditing mechanism worth its name.