Torrent Power (TORNTPOWER) Q4 05/06 earnings summary

Executive summary

• 18-month period ended 30 Sep 2006 reflects amalgamation of the Ahmedabad, Surat and generation operations, effective from 1 Apr 2005; prior-year comparisons are not directly comparable.

• Total income was Rs 3,939.51 crore, profit before tax Rs 360.30 crore and profit after tax before contingency reserve Rs 179.27 crore.

• Operations improved across generation and distribution: T&D losses fell to 9.67% from 11.99%, while sales rose 12.82% on an annualized comparison.

Financial highlights

• Gross profit before depreciation, interest and tax was Rs 714.26 crore; depreciation Rs 290.87 crore; interest Rs 63.09 crore; and PBT Rs 360.30 crore.

• PAT before contingency reserve was Rs 179.27 crore after Rs 159.82 crore current tax, Rs 16.41 crore deferred tax, Rs 1.06 crore fringe benefit tax and Rs 3.74 crore prior-year tax provision.

• Proposed dividend was Rs 1.20 per share, or 12%, for the 18-month period; total dividend and distribution tax outflow was Rs 64.64 crore.

• Net sales of electricity were Rs 3,783 crore, representing 96% of total revenue; average realization was Rs 3.74 per unit sold.

Outlook and guidance

• The Rs 3,096 crore, 1,100 MW SUGEN project was 56% complete by EPC work; the first 367 MW block was scheduled for commissioning in Q3 2007.

• Bhiwandi distribution franchise was selected for a 10-year term, serving 1.6 lakh consumers and estimated demand of 750 MVA; operations awaited execution of the franchise agreement.

• Qualified to bid for ultra-mega projects at Mundra and Sasan; evaluating generation, distribution franchise, transmission and captive coal-supply opportunities.