The cash-strapped defence PSU, Hindustan Aeronautics Limited (HAL), on Monday reported 17.03% decline in net profit at Rs 455 crore for the third quarter ended December 31, 2018. During the same quarter a year ago, its net profit stood at Rs 549 crore, the company said in a BSE filing.
The company’s profits have eroded on account of a 5% rise in expenses during the quarter. The company’s expenses stood at Rs 3,799 crore during the quarter, as against Rs 3,618.14 crore in the corresponding quarter last year.
On the revenue front, the company registered Rs 4,625.26 crore topline during the quarter, up 8.11% from Rs 4,278.24 clocked in the corresponding quarter last year.
Rising finance cost ::
The company, on Monday, reported that it has paid Rs 29.69 crore in its interest payments during the October to December quarter, as against Rs 1 lakh paid during the corresponding quarter last year — a jump of 2,969 times.
On a sequential basis, the financing costs of the company have jumped by 21.34 times from Rs 1.39 crore in the September quarter.
Financing cost, also known as the cost of finances, is the cost, interest, and other charges involved in the borrowing of money to build or purchase assets.
The Bengaluru-based Navratna PSU has been, of late, borrowing money to sustain its day to day operations, as the payments from the Indian armed forces — its biggest clients — are not getting cleared from past one and a half years.
In fact, the company recently borrowed a whopping Rs 1,000 crore to pay the salaries to its employees.
The company, in January this year, had also received approval from lenders to enhance its working capital limit from earlier Rs 2,500 crore to Rs 6,050 crore, which was sanctioned by a consortium of banks led by State Bank of India (SBI).
Fraud detected ::
In a regulatory filing, HAL said a fraud involving misappropriation of funds by a company official in collusion with six contractors has been noticed by the management and referred to the vigilance department for further investigations.
“The vigilance department based on the investigations has lodged FIR with Central Bureau of Investigation (CBI), Bhubaneshwar. An amount of Rs 18.76 crore has been provisionally assessed as fraudulent payments made to contractors during the period from December 2013 to September 2018 and reported in the FIR with CBI,” the company said.