GMR Infra’s Q4 Net Doubles on Asset Sales
Bangalore-based GMR Infrastructure’s quarterly net profit doubled to .` 1,170 crore, propped up by asset sales, but the company expects operational income to increase in the future as it hopes the new government’s policies will catalyse sectors such as highways, energy and aviation. The company’s gross revenue rose 12.42% to .` 2,961 crore for the quarter ended March.
“The profit is coming out of exceptional items, asset sales. In future we expect the profit to come from company operation. Divestment of Turkey airport generated .` 1,670 crore of cash profit and made the operating results attractive for the group,” said Madhu Terdal, group CFO, GMR Infrastructure. The firm divested our 40% stake in Sabiha Gokcen Airport in Istanbul last year.
On a consolidated basis, company’s net profit slumped to .` 10 crore for the full year as opposed to .` 88 crore for the year ended March 2013.
The total gross income increased by 6.36% to .` 10,653 crore in the year ended March 2014 against the same period last year. GMR’s airport division reported .` 1,291crore profit against .` 79 crore due to stake sale in Turkey Airport, while revenue fell 11.8% to .` 1,548 core compared to the same period last year.
However, the company’s power and road business reported a loss of .` 364 crore and .` 69 crore each.
“Difficult times are over and we expect the performance to improve in the coming year. We are optimistic that with the new government, there will be recovery in the Infrastructure sector, and we are well placed to take part in this phase, though we will be selective,” says Terdal.
GMR infrastructure sold assets such as Turkey Airport, GMR Jadcherla expressway, Eloff and Kendal mines of Homeland Energy and Singapore power plant for .` 10,000 crore last fiscal. “We realised .` 4,900 crore of equity through asset sale and were able to bring down debt by .` 6,000 crore. While we sold assets, the company also created assets of .` 10,000 crore during the same period,” Terdal said. GMR Infrastructure, which has .` 37,700-crore net debt, has been stressed in the past couple of years. It is now looking to embark on the next level of divestment by selling around 200 acres of real estate at Delhi International Airport in phases and other assets it holds. “Long-term growth will come from reducing corporate debt and interest rate apart from improving operational performances. We expect to reduce corporate debt by .` 1,500 crore in the coming quarter,” says Terdal. The company had a corporate debt of .` 6,000 crore as on March 31. GMR stock closed flat at .` 33.40 on the BSE, in line with the benchmark index that was down 0.07%.