Delhi, Istanbul airports drag GMR net

Infrastructure major GMR Infrastructure is awaiting regulatory clarity on airport sector, which is being seen as a major drag on its overall performance.

“We are waiting for regulatory clarity on tariffs before turning around the airport assets. All the airport assets we have are fundamentally strong,” A Subba Rao, GMR’s chief financial officer, said.

The company has four airport assets — Delhi, Hyderabad, Istanbul and Male. Of these, Delhi airport’s performance has a major negative impact on the overall performance of the company.

The Delhi International Airport Ltd (DIAL) has recorded a net loss of about Rs192 crore for the first quarter ended June 2011 on revenues of about Rs193 crore.

“While the tariff revision in Delhi airport is under active approval process with Airports Economic Regulatory Authority of India (Aera), DIAL continued to earn lower revenues at earlier tariff structure thus incurring loss of Rs192 crore. The increased cost of operations of DIAL after commissioning of T3 (terminal) are being accounted for without commensurate revision in tariffs,” he said.

In fact, the losses at DIAL have adversely impacted the overall consolidated results causing a net loss of Rs67 crore for the company for the quarter. “The 38% rise in interest costs and 67% increase in depreciation are also mostly due to the capitalisation of terminal 3 at Delhi,” he said.

For the first quarter, the company recorded Rs24 crore loss on a turnover of Rs181 crore for its Istanbul airpot. The other major airport asset of the company at Hyderabad recorded Rs146 crore revenue and Rs10 crore profit.

According to Rao, even the ADF collection at Delhi has come to a halt for the last few months.

Meanwhile, the power sector operations of the company are already into profits. The company currently operates about 810 mw generation capacities at Kakinada, Chennai, Vemagiri and Gujarat. 

The power segment has contributed about Rs688 crore to the topline and about Rs48 crore to the bottomline.