A. Subba Rao, President and Group CFO, GMR Group, is a Commerce Graduate and a Chartered Accountant. He has been associated with GMR Group in its evolution from a small manufacturing company to its current standing as a premier Infrastructure Company for close to 12 years - the past three years as the President and Group CFO. He has been a part of every infrastructure project and most milestones in this transformational journey of GMR.
Before joining GMR in December, 1999, ASR spent the initial five plus years in audit practice both independently and with M/s Sudit K Parekh & Co, Mumbai, as their Hyderabad office Manager and then moved to ITW Signode, Hyderabad, in April, 1992 to head the corporate finance and accounts. Between mid-1996 and end 1999, he was associated with Kotak Mahindra Finance at Mumbai.
GMR Infrastructure Limited is a Bangalore-headquartered global infrastructure major with interests in Airports, Energy, Highways and Urban Infrastructure sectors. It has successfully employed the public-private partnership model to build a portfolio of high quality assets. The Company has 16 power generation assets of which 5 are operational and 11 are under various stages of implementation and 10 Road assets, of which 6 are operational and 4 are under construction. In the Airports sector, it has developed and commissioned the Greenfield International Airport at Hyderabad. The Company, besides operating the existing Delhi International Airport, has also built a brand new integrated terminal T3 which was commissioned in time for the Commonwealth Games in October 2010.
Speaking with Yash Ved of IIFL, A. Subba Rao says “Current capex for FY13 is at Rs140bn.”
Brief us about the Q3 business perspective?
The quarter has seen huge revenue growth. We have foreign currency fluctuations which impacted EBITDA growth. With the tariff revision process for Delhi Airport having commenced consequent to the issue of Consultation Paper by AERA, the adverse impact of DIAL’s results on the profitability of the company would soon be mitigated.
All the projects are on schedule. We have done lot of investment in under-construction projects.
Our international business is also progressing well. There have been delays in power projects. Land acquisition problem is the main issue in power projects.
Brief us about your financials?
GMR Infrastructure Ltd has posted a net loss after tax and minority interest and share of profit from associates of Rs (1079.50) mn for the quarter ended December 31, 2011 as compared to Net Loss of Rs (222.50) mn for the quarter ended December 31, 2010.
Total Income has increased from Rs 14040.90 mn for the quarter ended December 31, 2010 to Rs 20944.50 mn for the quarter ended December 31, 2011.
The Quarter witnessed a continued surge in the net revenues by 47%, despite lower PLF in Energy sector due to lower gas availability for both the operating gas projects and major maintenance shutdown of Vemagiri Power. Energy sector also suffered loss of revenue due to floods in its South Africa Coal Mine.
What are the current and upcoming highways and Airport projects?
GMR Highways Business consists of 6 operating assets (3 toll and 3 annuity) with total of 1,684 lane kilometers, 3 projects (2 toll and 1 annuity) under construction with a total of 1294 lane kilometers and a toll project of 3,330 lane kilometers under development for which financial closure is in progress.
The operating toll road projects recorded a revenue growth of 8% for the quarter. The Highways segment is nearing the breakeven PAT position, despite the crippling losses in Ambala Chandigarh project due to massive traffic diversion.
GMR Airports Business consists of 2 Indian airports at Delhi and Hyderabad and 2 airports abroad at Istanbul in Turkey and Male in Maldives. Despite a significant growth in the EBITDA, the Sector continues to post losses due to pending tariff revision for Delhi Airport.
Cite some of the significant developments during the Quarter.
In terms of Airports segment, DIAL witnessed a traffic growth of 29% for the quarter and 24% the 9 months. It has registered a passenger traffic volume of 9.96 million for the quarter and 27.01 million for 9 months.
GMR Hyderabad International Airport witnessed a traffic growth of 12% for the quarter and 14% the 9 months.
Istanbul Sabiha Gokcen International Airport witnessed a traffic growth of 6% for the quarter and 15% the 9 months. Registered a passenger traffic volume of 3.20 million for the quarter and 10.84 million for 9 months
Male International Airport witnessed a traffic growth of 27% on sequential quarter basis. Registered a passenger traffic volume of 0.76 million for the quarter and 1.93 million for 9 months
Comment on your capex plans?
Current Capex for FY13 stood at Rs140bn
When can we expect GMR Energy IPO?
Depending upon the market conditions, we will decide GMR Energy’s IPO.
How much investment are you planning for power projects?
GMR Energy Business consists of 5 operating assets (including 2.1 MW wind power and newly commissioned 25 MW Solar Project in Gujarat on 31st Dec 2011) with a cumulative capacity of 835.6 MW and 5 generation projects under construction with an aggregate capacity of 4938 MW. Of this new capacity, 2418 MW is scheduled to be commissioned within the next 12 months.
What is your current current debt?
Our current gross debt stands at Rs300bn. Net debt is around Rs 250bn.