REC declares Financial Results for FY 2019-20
Dated Jun 17 2020
The Board of Directors of REC Limited (formerly Rural Electrification Corporation Limited) approved the audited standalone and consolidated financial results for FY 2019-20 today.
Operational and Financial Highlights – FY20 vs FY19
- Sanctions - Rs. 1,10,908 crore vs. Rs. 1,15,957 crore
- Disbursements - Rs. 75,667 crore vs. Rs. 72,165 crore, up 5%
- Total Income – Rs. 29,855 crore vs. Rs. 25,341 crore, up 18%
- Net Profit – Rs. 4,886 crore vs Rs. 5,764 crore
During the year ended 31st March 2020, the total income of the Company increased by 18% to Rs. 29,855 crore as against Rs. 25,341 crore for the year 2018-19. The Net Interest Income also posted an increase of 15% to reach Rs. 10,425 crores during the current year. However, inspite of the healthy operational performance, the profits were impacted due to sharp depreciation in the Indian currency during Q4 FY20 owing to the volatility in global financial markets caused by Covid-19 outbreak. This led the Company to end the year with the Net Profit of Rs. 4,886 crores and Earnings Per Share (EPS) of Rs. 24.74.
The loan book has grown by 15% as it increased from Rs. 2.81 lakh crores as at 31st March 2019 to Rs. 3.22 lakh crores as at 31st March 2020. Despite the economic disruptions during the last few days of the financial year, the Company disbursed loans amounting to Rs. 6,474 crores during the period 17th to 31st March 2020, while ending the year with disbursements of Rs. 75,667 crores.
With Capital Adequacy Ratio at 16.06%, the Net Worth of the Company has increased from Rs. 34,303 crores as at 31st March 2019 to Rs. 35,077 crores as on 31st March 2020 with a book value per share of Rs. 178. While the Capital Adequacy Ratio stays comfortably above the regulatory requirement, the Company has also raised subordinated bonds amounting to Rs. 2,000 crores in June 2020 to further cushion the regulatory capital for future business growth.
During the Covid-19 disruptions, the Company extensively leveraged the digital technology for review & monitoring, information-sharing and knowledge management. The strong Information Technology capability coupled with the availability of E-Office and ERP applications through secure Virtual Private Network (VPN) allowed the Company to continue the business operations without any disruptions due to lockdown. While the Company allowed an ‘Opt-in’ policy for moratorium for the amounts falling due between 1st March 2020 to 31st May 2020, the Company has already recovered more than 78% of the total recoveries of Rs. 9,500 crore due for March 2020.
At the same time, the Company has an access to various sources for funding its operations including domestic institutional bonds as well as foreign currency bonds, which enhances the reach of the Company to obtain funds from various geographies including United States of America and Europe. The Company has been able to raise more than Rs. 20,000 crores post 31st March 2020 from domestic and international markets. This also includes USD 500 Million raised through USD Bonds wherein REC became the first Indian company to successfully raise such bonds during the Covid-19 pandemic on 12th May 2020.
Talking about the impact of Covid-19 on the Company, Sanjeev Kumar Gupta, Chairman & Managing Director and Director (Technical), said, “The World is facing an unprecedented situation in the form of Covid-19. However, considering the Company’s liquidity position and access to diverse sources of funds, we have been able to steer through the challenging times without any pressures. The situation has been under close watch by the management to take prompt actions in the best interest of the Company and the stakeholders in an optimised manner. Several Govt. announcements as Covid-19 relief measures will further improve liquidity position for NBFCs and pave way for power sector reforms.”