New Delhi, Nov 6 () State-owned Rural Electrification Corporation (REC) today reported 30 per cent decline in standalone net profit to Rs 1,214.66 crore in the second quarter ended September 30, mainly due to lower revenues.
The company’s standalone net profit was Rs 1,751.27 crore in the quarter ended September 30, 2016, REC said in a BSE filing.
According to the statement, total revenue of the company decreased to Rs 5,627.71 crore in the second quarter from Rs 6,108.55 crore in the same period last fiscal.
The company’s main business is to provide finance to power sector. Therefore, its most of the revenue comes from interest income on advances.
The interest income of the company has declined to Rs 5,371.05 crore in the September quarter from Rs 5,755.86 crore in the year-ago period.
The company’s half yearly profit till September 30, 2017 also dropped to Rs 2,515.80 crore from Rs 3,172.13 crore in the corresponding quarter last year. Similarly, the total revenues decline to Rs 11,289.87 crore from Rs 12,159.28 crore in the same period previous fiscal.
Later in the day, REC Chairman and Managing Director P V Ramesh explained reporters in a press conference that the bottom line was affected due to lower yield because of prepayments by discoms under UDAY scheme.
Ujjwal Discom Assurance Yojana (UDAY) was launched in November 2015 for revival of debt laden power distribution firms of states. The discoms along with states issued bonds in the ration of 25:75 per cent to repay their debt.
Ramesh also told reporters that the Rs 45,000 crore prepaid to the REC under UDAY scheme was received by the company without any penalty.
He also added that the said amount has already been disbursed (to new lenders) to keep the wheels the company moving.
Exuding confidence Ramesh talked about huge investment opportunities in power distribution, transmission and renewable segments in coming days.
The company has disbursed Rs 56,168 crore (loans) in half year till September 30, this fiscal as against Rs 50,045 crore a year ago.
The loan book of the company has increased by 10 per cent to Rs 2,15,845 crore as of September 30, 2017 as compared to loan book of Rs 1,96,652 crore as on September 30 last year.
Further, the company said that the outstanding borrowings are Rs 1,75,626 crore as on September 30, 2017.
The net worth of the company as on September 30, 2017 has increased to Rs 35,145 crore as against Rs 31,778 crore a year ago, registering a growth of 11 per cent.
The company gross NPAs (bad loans) stand at 2.54 per cent as on September 30 this year as against 2.60 per cent as on June 30, 2017. The ratio was 2.45 per cent on September 30, 2016.
The interest coverage ratio has been 1.55 as on September 30, 2017 as compared to 1.71 a year ago.
The book value per share of Rs 10 each stands at Rs 177.96 as on September 30 this fiscal.
The earnings per share for the half year ended September 30, 2017 stood at Rs 12.74 per share of Rs 10 each, it added.
Ramesh also said that he expects the loan book growth to accelerate in coming months.
Another senior official said REC is talks with multilateral lending agency Asian Development Bank for funding green energy projects.
Besides, the official said that there is a plan to raise USD 650 billion via bonds for refinancing.
The company has already got the Reserve Bank’s nod to raise USD 1.5 billion this fiscal. KKS BAL
Source: PTI
