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Lanco Infratech plans to spend as much as Rs 24,000 crore on capital expenditure over three years, even as the diversified group remains “cautious” amid coal supply issues hurting the overall power sector.
The company, which currently has a generation capacity of 3,892 MW, aims to add about 5,000 MW in three years, including this fiscal.
“We are expecting to see capital expenditure of about Rs 24,000 crore over a period of three years, including the current fiscal (ending March, 2012). The capital expenditure would be Rs 8,000 crore every fiscal till the 2013-14 period,” Lanco Infratech CFO Mr J Suresh Kumar told PTI.
However, the company is adopting a cautious approach against the backdrop of coal supply shortages, as well as the poor financial health of State Electricity Boards (SEBs).
“We are taking a cautious view about our investment and capital expenditure plans,” he noted.
“Generally, the power sector is going through a lot of challenges... including coal shortages (for thermal power plants) and financial problems of SEBs,” Mr Suresh Kumar said.
According to him, sometimes there is a delay in settlement of bills related to supply of electricity to SEBs.
Bogged down by staggering forex loss, Lanco Infratech posted a net loss of Rs 259.48 crore for the three months ended September, 2011.
The entity was hit by a notional forex loss of Rs 288 crore, as well as non-cash elimination related to transactions with subsidiaries and associates of about Rs 273 crore.
The company had raked in a net profit of Rs 70.46 crore in the September quarter of FY’11.
Mr Suresh Kumar said the forex losses were due to rupee volatility and added that the group has foreign currency liabilities of nearly $1 billion, with the majority of them being American dollar loans.
On the other hand, the entity’s cash profit jumped to Rs 44.04 crore in the latest September quarter from Rs 22.49 crore in the year-ago period.
Lanco Infratech has interests in thermal, hydro, wind and solar power projects.
When asked whether the company is looking for any acquisitions, Mr Suresh Kumar replied in the negative.
In March this year, Lanco Infratech acquired Australia-based Griffin Coal for about A$730 million.
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