Adani Power hits back into profit

Adani Power has returned to profitability following favourable verdicts by state power authorities. Additionally, the Mundra plant recognised additional income of 217.75 crore on account of carrying costs associated with a change in law as a result of domestic coal shortages.

Adani Power returned to profit at the conclusion of FY19 as a result of favourable decisions by state power regulators. These include judgements by Maharashtra's, Gujarat's, and Rajasthan's regulatory commissions approving change-in-law claims affecting coal supply to its facilities.

Adani Power (Mundra) Limited, the ultra mega power coal project, renegotiated power purchase agreements (PPAs) with Gujarat Urja Vikas Nigam Limited, the state discom, in the March quarter. The PPAs were authorised by the Central Electricity Regulatory Commission. The Supplemental Agreement's effect on revenue of 711.28 crores was factored into the quarter's results. The plant also recognised other income of 61.48 crore during the year, as a result of an order from the Appellate Tribunal for Electricity awarding carrying cost benefits on approved change-in-law claims such as Clean Energy Cess, Compensation Cess, Countervailing Duty, Integrated Goods and Service Tax, and Basic Custom Duty, based on submissions of carrying cost claims to Gujarat Discom (distribution companies) and Haryana Discoms. Haryana Discoms has paid the entire claim amount, while Gujarat Discoms has paid a large chunk of the claim, the business stated in notes to its March quarter financial results.

According to the Central Electricity Regulatory Commission's order, the Mundra plant additionally recognised other revenue of 217.75 crore (including 216.58 crore for prior years) for carrying costs associated with a change in law owing to domestic coal shortage.

Adani's Tiroda power plant benefited from a Maharashtra Electricity Regulatory Commission order allowing for change-in-law claims due to coal supply shortages under the New Coal Distribution Policy until March 31, 2017. The facility recorded estimated revenue of 1685.12 crore against such claims, including revisions made in previous financial years based on the aforementioned decision. Additionally, it recorded other income of 131.69 crore in Q4 as a result of the submission of a carrying cost claim to Maharashtra Discom, which was fully recovered.

The Rajasthan Electricity Regulatory Commission has granted relief for the additional cost incurred in procuring alternate coal. As a result, Adani Power Rajasthan (Kawai) has accounted for the claim receivable under the government's NCDP policy, for which the company received a total of Rs 2,351.14 crore during the year.

Adani Power has a total installed capacity of 10,440 MW of thermal power output split among four power plants in Gujarat, Maharashtra, Karnataka, and Rajasthan, in addition to a 40 MW solar power facility in Gujarat. The company, which is responsible for the Gautam Adani group's thermal and renewable energy generating, posted a net profit of 634.64 crore for the March quarter, compared to a deficit of 653.25 crore a year before. For FY19, the company reported a net loss of 984.4 crore, down from 2073.77 crore in FY18.

The average plant load factor (PLF) increased to 79 percent in Q4FY19, up from 37 percent in Q4FY18, while unit sales more than doubled to 16.6 billion units in Q4FY19, up from 7.9 billion units the previous year. Consolidated total income was Rs. 8,078 crore for the quarter, up from Rs. 4,161 crore in Q4FY18, a 94 percent rise, while consolidated EBIDTA was Rs. 1,964 crore, up from Rs. 1,414 crore in Q4FY18, a 39 percent increase.

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