(Corrects reason for profit decline in headline, first and third paragraphs of story published on Feb. 10.)
Feb. 10 (Bloomberg) -- Tata Power Co., India’s largest private utility, posted a 40 percent decline in third-quarter profit after writing off deferred expenses from coal mines in Indonesia.
Group net income fell to 2.66 billion rupees ($54 million) in the three months ended Dec. 31 from 4.42 billion rupees a year earlier, the Mumbai-based company said today in a statement. The median estimate of 13 analysts compiled by Bloomberg was a profit of 5.21 billion rupees.
Tata Power wrote off 6.48 billion rupees of accumulated deferred expenses at coal mines at PT Kaltim Prima Coal in the quarter. The company also took an impairment charge of 1.62 billion rupees on account of rising prices of Indonesian coal to be used for its $3.8 billion Mundra plant in the western state of Gujarat. The company has said that the Southeast Asian nation’s policy of regulating exports of the fuel could double the cost of generating power at Mundra, which needs 12 million metric tons a year of the fuel.
Tata Power fell 0.6 percent to 110.80 rupees at close in Mumbai, before the earnings announcement. The stock has gained 27 percent this year, compared with a 15 percent increase in the benchmark Sensitive Index.
Net sales rose 51 percent to 66.5 billion rupees. Total expenses surged 65 percent to 60.03 billion rupees, while interest expenses almost doubled to 4.2 billion rupees from a year earlier, the company said in the statement.
Tata Power had a generation capacity of 3,797 megawatts, according to a presentation made to investors in December. It plans to increase capacity eightfold to 25,000 megawatts by 2017.
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