HCC Q4 net loss at 54 crore; expects FY13 to be gloomy for infra

Hindustan Construction Company (HCC), which today reported a standalone net loss of Rs 54.17 crore for the fourth quarter ended March 31 - owing to rise in interest cost and debt overhang - expects fiscal 2012-13 to be harsh for the infrastructure sector.

The company had posted a net profit of Rs22.60 crore in the same period last year.

"In the backdrop of current situation in the country where there is economic slowdown, particularly in the infrastructure sector, and delay in decision making, 2012-13 will continue to be harsh for the industry," HCC Chairman and Managing Director Ajit Gulabchand told reporters here.

The company posted a 4.42 per cent decline in sales at Rs1156.24 crore for the quarter as against Rs 1209.73 crore in the corresponding quarter last year.

For the year ended March 31, HCC posted a net loss of Rs222.24 crore as against profit of Rs71 crore in FY11. Turnover stood at Rs4002.75 crore as compared to Rs4143.97 crore a year ago.

The decision-making environment has caused a number of delays, particularly in delivering claims, he said.

"Most of our projects have been cost overrun. These have been accepted by the clients but the quantification is yet to be done. The claims, which were around Rs700 crore till last year, have mounted to Rs2,000 crore."

Gulabchand said the delay in realisation was forcing the company to borrow excessively to meet its financial requirements.

"Because of the delay in realisation of claims, we had to borrow excessively and this borrowing has hurt our bottom line because of the excess debt overhang. But we have now set up special task forces for claim realisation."

Due to the mounting debt pressure, the company had to apply for restructuring of debt to the tune of Rs 3300, Gulabchand said.

"In this atmosphere, we were faced with a debt overhang and as a result, HCC applied for corporate debt restructuring (CDR). The process is underway and we are likely to conclude it soon. This will give us sufficient time to pay back our debt. We will also monetise some of our assets."

On HCC subsidiary Lavasa Corp (LCL), he said, "the company resumed development and construction activities post Ministry of Environment and Forests (MoEF) clearance (for hill project near Pune) in November last.

"We have completed bookings for the first town in Dasve and launched new range of apartments in Mugaon under the second phase. Though Lavasa Corp posted a net loss of Rs138 crore and a turnover of Rs75.3 crore (in FY12), we expect it to turn profitable."

The company's overseas subsidiary, Steiner AG, posted a revenue of Rs3,996.2 crore and net profit of Rs15.8 crore during last fiscal.

The current order book of the company stands at Rs15,336 crore.

During the fiscal, the company's transport BOT subsidiary HCC Concessions diluted 14.5% equity stake to Xander Group at a valuation of Rs1,650 crore.