Tata Power Q3 net profit falls 40 percent to Rs 263 crore

Tata Power’s, India’s largest private power producer reported a steep fall in net profit for the third quarter of financial year 2012. It reported a net profit of Rs 263 crore against a profit of Rs 442 crore in the same quarter last year.

Its consolidated net sales have risen by 51 percent to Rs 6645 crore.

The net profit numbers came far below the CNBC TV 18 estimates of Rs 460 crore. The major blow came from a hit of Rs 162 crore impairment charge because the cost of importing Indonesian coal has turned out to be higher than expected. The Indonesian government last year had imposed an export duty on low quality coal, by which Tata Power had been hit because it was used for its Mundra power project.

The company had also taken a similar hit of Rs 823 crore last quarter.

The company’s profits were also hit as it booked a deferred cost for stripping for its joint venture with Indonesian coal mine company, PT Kaltim Prima Coal, worth Rs 650 crore.

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The company also made an accounting policy change in how it reports the foreign exchange gain/loss numbers in accordance with the Accounting Standard 11 as laid out by the ministry of corporate affairs. The company gained Rs 387 crore on its books due to the change.

Anil Mardana, managing director, Tata Power said, “Our strong operational and financial performances have been driven by all divisions.” The first 800MW supercritical unit of Mundra has been synchronized. The company said they are looking forward to a sustainable solution for the Mundra UMPP.