HCC in the red on interest burden, project delays

Infrastructure company Hindustan Construction Co (HCC) on Friday said it posted a net loss in July-September due to higher interest burden and significant delays in new infrastructure project allotments, sending its shares down nearly 5 percent.

“We are facing rough weather and this is the best we could do, of course this is also the monsoon period and that has its own share of delays,” Chairman and Managing Director Ajit Gulabchand, told reporters.

“I would expect the rough weather throughout the year,” Ajit Gulabchand added.

In July-Sept, the Mumbai-based company’s interest payment rose to Rs 107 crore from Rs 67 crore a year earlier. With a total debt of Rs 4,170 crore as of the end of September, its debt-equity ratio stood at 2.81.

It reported a quarterly net loss of Rs 40.54 crore compared with a profit of Rs 12. 14 crore in the year-ago period. Net sales slightly fell to Rs 838 crore from a year ago.

“The financial performance reflects the difficult economic and business environment,” Gulabchand said.

Its total order book as on September 30 was at Rs 16,175 crore. This excludes two contracts worth Rs 2,077 crore for which the company has emerged the lowest bidder.

The performance of arm Lavasa Corp, which is developing a $31 billion township near Pune, Maharashtra, continued to be adversely impacted by the ministry of environment and forest’s (MoEF) order to stop work, the company said in a statement.

As a result of the delays Lavasa Corp is loosing about Rs 2 crore a day, it said.

The Bombay High court has directed Government of Maharashtra to take action pending HCC’s unit Lavasa’s case in next two weeks and give a decisive order by 16 November, the statement said.

On Oct 14, the MoEF had declined to approve the first phase of the township project, citing non-compliance with conditions specified by a ministerial panel probing the project’s violation of green rules.

Watch video:HCC Q2 net loss at Rs 40.5 cr

Reuters