NTPC net profit in Q2 down 1.1% as spending increases due to coal shortage

NTPC net profit decreased 1.1% year-on-year to settle at 2,417.6 rupees in Three months ended in September 2018, while supply problems in coal hit the largest generator in the country in the face of rising spending.

The company's financial costs increased by 40.7% to Rs. 1,294.1 billion due to the increase in working capital loans. Other NTPC expenses increased by 25 percent to 1,997.6 crores, which the company attributed to exchange rate fluctuations.

The company's profit before interest, taxes, depreciation and amortization (EBITDA) was 5,962 rupees for the quarter, an increase of 6.6% over Q2FY18. The Ebitda margin, however, decreased by 140 basis points to 26.8%. The quarterly turnover increased 12.7% year-on-year to 22,486 crores.
Utilization levels of NTPC coal-fired plants also decreased, with the installation load factor (LFP) falling by almost 4 percentage points in one quarter to 72.6% .

The NTPC PLF in the first six months of fiscal year 19 decreased 2.5 percentage points to 75.3%.
The NTPC generated 65.9 billion electricity units during the quarter, recording an increase of 1.5%.
Rail-powered power plants operate on a daily basis, "said Prakash Tiwari, director of operations, during the conference call with badysts after the announcement of the results. Power plants are contractually entitled to receive fixed costs to recover their capital expenditures even if buyers do not supply electricity.

However, plants must have a minimum plant availability factor of 83% to claim fixed costs. The average FAP of NTPC power plants during the quarter dropped nearly 2 percentage points year-over-year to 84.3%, mainly due to a shortage of coal and planned shutdowns for maintenance.
The maintenance activity of the Unchaahar power plant, with a capacity of 1 550 MW, made 45 casualties. a boiler explosion – resulted in a crore under recovery of Rs 131 during the quarter. Management expects the plant to be back on December 15th.
In the course of recovery due to the coal deficit of the Mouda power station (2,320 MW), the 2,000 MW Simhadri power station and the 2,400 MW Kudgi unit: Rs 156 crore, Rs 78 crore and Rs 25 crore. respectively, in the first half of fiscal year 19. The total amounts recovered in the second quarter amounted to 330,000 crores.