NTPC

NTPC, the public sector power generation giant has turned in a revenue growth of 14% to Rs 15384.4 crore for the quarter ended December 2011 and that together with 830bps contraction in operating margin to 18.9% led to 21% de-growth at operating level to Rs 2907.46 crore. Eventually the net profit was lower by 10% to Rs 2130.39 crore due to decline in tax rate, higher other income despite higher interest expenses and depreciation charges.

Net sales net of electricity duty was higher by 14% to Rs 15332.3 crore. Prior period sales for the quarter (recognized as per CERC/APTEL) was - Rs 155.47 crore compared to Rs 159.8 crore in corresponding previous period. The other operating income for the quarter has jumped by 240% from Rs 15.02 crore to Rs 51.09 crore. Total sales also include advance against depreciation recognized as prior period sales of Rs 1.01 crore against Rs 75.21 crore in the corresponding period.

Sharp contraction in operating margin was largely on account of increase in fuel costs, which as a proportion to sales was higher by 844 bps to 70.2% although staff costs were lower by 42bps to 4.7%. Other expenses were higher by 32bps to 6.3%. Other expenditure include exchange differences arising from settlement/translation of foreign currency monetary items denominated in foreign currency (other than long term) amounting Rs 7.09 crore for the quarter and Rs 1.06 crore in the corresponding previous period.

Other income was higher by 32% to Rs 861.02 crore. The interest cost was up 38% to Rs 449.62 crore. The interest and finance charges for the quarter include exchange differences regarded as adjustment to interest costs for the quarter Rs 35.64 crore compared to Rs 35.13 crore in the corresponding previous quarter. PBDT was thus lower by 17% to Rs 3318.86 crore. However, the depreciation was higher by 26% to Rs 756.03 crore. Thus, the PBT de-grew by 25% to Rs 2562.83 crore.

Moreover the provision for taxation was down by 58% to Rs 432.44 crore at effective tax rate of 16.9% against 30.5% and thus de-growth at net profit level was 10% to Rs 2131.39 crore.

Nine months performance

For the nine months ended December 2011, revenues grew 10% to Rs 45252.19 crore. OPM contracted by 320 bps to 20.6% and thus operating profits de-grew 5% to Rs 9331.35 crore. The net profit was higher by 5% to Rs 6630.29 crore due to decline in tax rate, higher other income although interest expenses and depreciation charges were higher.

Net sales net of electricity duty was higher by 14% to Rs 44881.33 crore. Prior period sales for the quarter (recognized as per CERC/APTEL) was Rs 363.34 crore compared to Rs 380.36 crore in corresponding previous period. The other operating income for the quarter has jumped by 659% from Rs 48.74 crore to Rs 369.85 crore. Total sales also include advance against depreciation recognized as prior period sales of Rs 1.01 crore against Rs 1838.63 crore in the corresponding period.

Contraction in operating margin was largely on account of increase in fuel costs, which as a proportion to sales was higher by 674bps to 68.9%. On the other hand the staff costs were lower by 20bps to 4.8% and other expenses were lower by 333bps to 5.6%. Other expenditure include exchange differences arising from settlement/translation of foreign currency monetary items denominated in foreign currency (other than long term) amounting Rs 23.08 crore and Rs 1.39 crore in the corresponding previous period.

Other income was higher by 40% to Rs 2547.99 crore. The interest cost was up 8% to Rs 1155.14 crore. The interest and finance charges for the quarter include exchange differences regarded as adjustment to interest costs Rs 117.74 crore compared to Rs 112.28 crore in the corresponding previous period. Interest and finance charges are lower by Rs 198.83 crore for the nine-month period ended 31^st December 2011 respectively on account of reversal of interest payable to beneficiaries as per APTEL order, consequent upon the favourable judgement of the Hon'ble Supreme Court of India, liability for which was created in earlier years. PBDT was thus higher by 1% to Rs 10724.2 crore. However, the depreciation was higher by 15% to Rs 2055.44 crore. Thus, the PBT was lower by 1% to Rs 8668.76 crore.

Moreover the provision for taxation was lower by 18% to Rs 2038.47 crore at effective tax rate of 23.5%, down 460bps and thus the growth at net profit level was 5% to Rs 6630.29 crore.

Other developments

The Central Electricity Regulatory Commission (CERC) notified the Tariff Regulations, 2009 (Regulations, 2009) in January 2009, and also notified First and Second Amendment in May and June 2011. In line with First Amendment dated 2^° May 2011, during the year the CERC has issued provisional tariff orders w.e.f. 1^st April 2009 for all the stations except Talcher Thermal Power Station (TTPS).

Beneficiaries are billed in accordance with the said provisional tariff orders except for TTPS where it is done on provisional basis and for National Capital Thermal Power Station - II where it is billed on final tariff order basis. The amount billed during the quarter and for the nine-month period ended 31^st December 2011 on this basis are Rs 15675.91 crore and Rs 44329.67 crore respectively (Corresponding previous quarter and nine-month Rs 13006.12 crore and Rs 37669.27 crore respectively).

CERC has issued final tariff orders for some of the stations under the Regulations, 2009, which considers the projected year-wise additional capital expenditure for the tariff period 2009-14. Sales for these stations has been recognised, by truing up capital expenditure to arrive at the capacity charges. Sales for these stations has been recognised as Rs 2045.60 crore for the quarter and Rs 5679.49 crore for the nine-month period ended 31^st December 2011 (Corresponding previous quarter and nine-month Rs 1417.15 crore and Rs 4396.62 crore respectively). For all other stations, pending determination of station-wise tariff by the CERC, sales have been provisionally recognized at Rs 13806.16 crore for the quarter and Rs 39057.81 crore for the nine-month period ended 31^st December 2011' respectively (Corresponding previous quarter and nine-month Rs 11450.70 crore and Rs 33964.25 crore respectively) on the basis of principles enunciated in the said Regulations, 2009 including the Amendments thereto.

During the quarter, one unit of 660 MW at Sipat project of the Company has been declared commercial w.e.f 1^st October 2011.

Valuation

Stock closed at Rs 172 on 30^th January 2012 on BSE.

NTPC: Financial Result