HCC reports third quarter loss

Indian contractor HCC reported a net loss of INR 130.4 Crore (US$ 26 million) for the quarter ending 31 December, 2011, after being hit by project delays and higher costs in a difficult economic environment.

The result compared to net profit of INR 7.9 Crore (US$ 1.6 million) for the three months ended 31 December, 2010. Turnover also slipped from INR 1027 Crore (US$ 204 million) in the fiscal third quarter of 2010 to INR 949.2 Crore (US$ 188.5 million) for the fiscal third quarter of 2011.

HCC's subsidiary Lavasa has been affected by delays and legal issues relating to a development near Pune, Maharashtra. The Indian Ministry of Environment & Forests (MoEF) ordered construction work to stop in January, 2011, after finding that the developer had flouted environmental laws.

But the contractor said that Lavasa had now received clearance from MoEF for the first phase and construction had resumed.

HCC said it had made provision of INR 166.3 Crore (US$ 32.4 million) to cover expected losses on projects as well as cost revisions, among other exceptional items.

Chairman and managing director Ajit Gulabchand said, "The financial performance reflects the difficult economic and business environment. The revenue growth was lower due to slow order booking during the last four quarters, execution bottlenecks, rising interest cost and payment delays by clients."

The contractor's order backlog stood at INR 16240 Crore (US$ 3.2 billion) at the end of the fiscal third quarter.