Revenue, profitability to take hit due to COVID-19, ops at standstill: SPML Infra

New Delhi, June 15 () SPML Infra on Monday said the COVID-19 pandemic has hit its operations hard, and revenue and profitability are likely to be adversely impacted as all projects have come to a standstill.

The infrastructure firm said normalisation of operations will take time as it is also facing shortage of labour.

"April-June 2020 being lockdown months, the revenues and profitability of the company are likely to be adversely impacted," SPML Infra said in a regulatory filing to the BSE.

"The company's project sites remained closed from March 23, 2020 due to lockdown and partially reopened with effect from May 04, 2020, which has impacted its operations during April and May 2020," it added.

The company said the pandemic has hit it very hard as labour force has been immobilised at sites due to lockdown, with the company taking care of all their overheads and protection costs, food and stay arrangements and other fixed costs with no matching revenues.

"Clients' payments are also not forthcoming in view of lockdown. All project sites have just come to standstill in lockdown and normalisation is bound to take time in view of "new normal" of safety measures and unavailability of labour," it said.

In view of the lockdown, profitability during first quarter (April-June) is likely to be adversely impacted and the company is closely monitoring it, SMPL Infra said.

The company is going through liquidity crunch with mismatched cash flow and is finding it difficult to meet its working capital requirements, it added.

"The liquidity impact has caused mismatch in meeting all such obligations...The management is closely monitoring the cash inflow and outflow....New projects have generally not come out in lockdown period. However, company being leading water and power EPC company, it sees robust business going forward," it said.

It said the company has restarted project operations at a few project sites with a small portion of the workforce, as is available due to migration, since May 4, 2020, adhering to the safety norms prescribed by the Government of India.

"We are in the process of obtaining permissions for the sites from principals to restart the work (depending on severity of pandemic contamination in the area) and mobilise labour where we have received permission.

"Besides, since third week of March, many of our site locations and HO locations being in lockdown and we finding it difficult to access documents and records and we still not being able to get employees to workplace due to problems, such as select containment zone, unavailability of public transport etc, we are facing problem in closing the books for annual accounts March'20 in time," it said. NAM RVK