IRB Infrastructure Developers posted a sharp year-on-year decline of 24% in net profit to R109 crore in the second quarter ended December 31, 2013, due to high finance costs.
IRB's finance costs surged a sharp 28% y-o-y to R204 crore, on account of interest costs (from the Jaipur-Deoli and IRDP Kolhapur projects, which became operational) getting charged to the profit and loss account this quarter instead of getting capitalised, said Virendra D Mhaiskar, chairman and managing director, IRB.
Income from operations declined 4% to R877 crore and total income also declined 4% to R906 crore. This was on account of 12% lower construction revenues during the quarter, which stood at R566 crore as construction on the Karwar-Kundapur project got delayed with the National Highways Authority of India (NHAI) not issuing an appointed date to IRB, Mhaiskar said.
Tolling revenues, however, surged 16% to R311 crore, with the Ahmedabad-Vadodara project contributing the majority of the revenues.
Ebidta increased 5% to R464 crore and the company was able to maintain the Ebidta margin at 27% due to lower expenditure as construction on Karwar-Kundapur project was delayed. Total expenses fell 12% to R554 crore. However, with a 28% surge in finance costs, profit before tax fell 13% y-o-y to R147 crore.
The toll collections on the Jaipur-Deoli project are currently 75% of the potential toll projected. Updating on toll collections on the Kolhapur project, Mhaiskar said the company is in the process of mending the destroyed infrastructure after which the tolling will begin. The loss on account of toll collections for the days lost would be R1-2 crore, he said. From January 12, 2013 onwards, tolling on the project had to be suspended following incidents of violence by locals protesting against toll collections on the route.
Jaipur-Deoli and IRDP Kolhapur projects stood at R15 crore and R1.9 crore, respectively, during the quarter,
During the quarter, IRB received a Letter of Award from NHAI for four-laning of the Solapur-Yedeshi section of NH-211 in Maharashtra. It is to be executed as BOT (Toll) under NHDP Phase - IV. The estimated project cost is R1,500 crore, with a concession period of 29 years and construction period of 910 days. The company has sought R189 crore as viability gap funding from NHAI.
Consequently, IRB’s order book stands at about R7,800 crore, of which R5,800 crore is to be executed in the next 2-3 years. This order book gives IRB visibility for the