HCC reports consolidated net profit at Rs 311 cr for Mar quarter

The company had clocked a loss of Rs 883.18 crore in the corresponding quarter of 2018-19, it said in a regulatory filing to the BSE. Its total consolidated income during the March 2020 quarter stood at Rs 2,376.68 crore, compared with Rs 2,426.02 crore in the year-ago quarter.

Hindustan Construction Company (HCC) on Thursday reported a consolidated net profit of Rs 311.38 crore for the quarter ended March 31, 2020. The company had clocked a loss of Rs 883.18 crore in the corresponding quarter of 2018-19, it said in a regulatory filing to the BSE.

Its total consolidated income during the March 2020 quarter stood at Rs 2,376.68 crore, compared with Rs 2,426.02 crore in the year-ago quarter. The company's total expenses on a consolidated basis declined to Rs 2,366.13 crore, against Rs 2,752.97 crore a year ago.

For the full year 2019-20, the company recorded a profit of Rs 197.03 crore on a consolidated basis. It had incurred a loss of Rs 49.85 crore in 2018-19. The company's order book stood at Rs 16,857 crore as on March 31, 2020.

"Project execution activities were halted during March 2020 due to the coronavirus pandemic. Turnover shortfall was also affected by working capital constraints that resulted in under-recovery of cost. This led to a net loss (standalone) of Rs 168.7 crore (for full year) despite healthy margins," the company said in a statement. It said the company is yet to ascertain the precise impact of COVID-19 on its operations and is working solutions with its various government agency clients.

The firm said it is committed to fulfilling its existing contractual obligations and appreciates various relief measures announced by the government through 'Force Majeure' invocation and Extension of Time (EoT) recompense measures. Nearly all of the company's project sites have started functioning, and per the strict guidelines issued by the authorities, it said and added that employees and workmen are observing social distancing and requisite safety norms at the workplace.

HCC Group Chief Executive Officer Arjun Dhawan said, "COVID-19 has exacerbated the liquidity crisis faced by the construction industry. The government is actively working to mitigate risk aversion by financial institutions through its policies, including settlement of legacy payment lock-ups." He further added, "HCC has undertaken several initiatives to divest assets and conciliate claims, besides redoubling its efforts to conserve cash. As we restart our operations, we look to the courage of our workforce and the support of our stakeholders, including senior lenders, to engineer unique solutions to meet the challenges of the post-coronavirus working environment." The statement said that in January 2020, the company initiated a resolution plan with its lenders that will carve out Rs 2,800 crore of its debt (including all overdues) to an investor-run special purpose vehicle (SPV) along with certain arbitration awards and claims in a move that will significantly deleverage the company and address its asset-liability mismatch. Pursuant to the plan, HCC will have a cleaner balance sheet with no debt servicing obligations for the next 34 months, it said adding that interest costs will reduce by about Rs 250 crore per annum.

Currently, Rs 4,159 crore worth of arbitration awards remain unrealised, HCC said adding that after the resolution plan, about Rs 1,550 crore awards and Rs 4,916 crore claims will be retained by HCC. HCC claims to have executed a majority of lndia's landmark infrastructure projects, having constructed 27 per cent of India's hydropower generation and 60 per cent of India's nuclear power generation capacities, over 3,960 lane km of expressways and highways, more than 360 km of complex tunnelling and 383 bridges.

The HCC Group, with a turnover of Rs 9,437 crore, comprises HCC Ltd, HCC Infrastructure Co Ltd, and Steiner AG in Switzerland..

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