|OPG Power Ventures
||EPS - Basic
||Market Cap (m)
OPG Share Discussion Threads
Showing 4801 to 4825 of 4825 messages
|Who let you out?|
|Hey Flowerhead! You still spouting utter b0ll0cks? Yup you are! Really please go do some homework.|
|You make a profit when you sell your shares for more than you bought them for(including costs).|
|You only make profits if you buy low and sell high. You must be a Master Trader Azalea.|
|Taking profits at the relatively higher levels and making a profit trading on the dips prepares me for the next big rise. Buyers today could be looking at a profit of 50% in 2018. An Aim listed company whose consumers and profits are totally unaffected by UK businesses and politics.|
|Anyway Azalea, you are unremittingly positive as you were at £1 (and over), 90p, 80p, 70p and 60p. Thanks for your thoughts.|
|Volume so far today is three times the 90day average. The 365k trade is the largest for some time, if it was a sell, I would have expected a lower price, so it could be an II topping up on the cheap. Time will tell.|
|No information flowing between members of the BoD and a number of shareholders in recent conversations/presentations should have contained price sensitive information unless it was already in the public domain. So it should not surprise anyone about any reticence by the BoD to talk of absolutes. To that end, we will have to wait for FY Results - end of July.|
|Financial investors joining hands with utilities to acquire power projects!?
|Financial investors joining hands with utilities to acquire power projects !?
|Good point Oldboffy. I think I have to go with the £27m number being correct, given that the half year results show earnings at 4.8pence. Additionally there was reference to earnings being little changed next year at £30m.
So maybe I misheard the 6.5 as being million in terms of opportunity loss of earnings this year due to the cyclone etc. I'm afraid the catch up was over a breakfast in a noisy venue and I was not able to take notes. I hope that clarifies things.|
the original goldbug
|The Original Goldbug. A question. You were given an indication that earnings this year will be circa 6.5p. This equates to about £22.75 million. But you also indicated that net earnings are forecast to be circa £27 million. If so this would give earnings per share of 7.7p. Which figure do we think is right?|
|The Original Goldbug. A vote of thanks is in order for your contribution to this board. So often comments have had little to do with information and more to do with hope or pessimism depending on which side of the fence one was sitting.|
|My understanding is that the contribution to net earning from solar for year end March 2018 would be marginal, maybe £1m if that. I would guess that once their two projects are up and running they will contribute circa 6-8m net depending on how they account for debt amortisation.
I would add they were cognisant that earnings expectations had been paired back considerably and I think they want to be comfortable in beating next year. For starters they sort of suggested that the politicians death and the cyclone cost £6m from this year's earnings. I tried to push and say therefore next year's earnings would be considerably better and got an inconclusive answer before the conversation moved on.
My personal thoughts, for what it's worth, is that the stock is cheap at current levels but not wildly so and some of my more bullish price forecasts will take longer to play out. The stock currently trades at book value and I think a more reasonable price for a stock with a ROE of 15% in India is about 1.4x book so a price of 70-75p seems reasonable.
Of course longer term the ROE should creep up to nearer 20% and there is the added optionality that they do a great deal. Longer term there has to be more profitability for the whole industry if the government is going to have its power requirements met and OPG as one of the lowest cost producers, will be in a position to capitalise on India's inevitable demand for more power.|
the original goldbug
|Original, thanks for sharing, very interesting. Can you clarify on the point about solar adding to earnings in year end March 2019 - I was under the impression some solar will be operational in 2017 so should have a good handful of months adding to March 2018?|
|I had an open and friendly discussion with Arvind Gupta and co this morning.
Firstly earnings will be roughly 6.5 p for current financial year and they will only grow slightly in the year ahead. Apparently the reason for the more bullish numbers floating around was non company brokers putting out aggressive buy recommendations without consulting management. I've been back in the stock since June or so of last year and didn't feel it was right to push them too hard on this issue.
So net earnings this year will be £27 and £30m next year. I was more interested to learn what earnings could be when everything is hunky dory at Gujarat. The load factors are at about 68% rising to 70% next year. Theoretically they could get to circa 90%. What is stopping this is permission to lay more transmission. They are being stifled by local government who also operate and own power producers in Gujarat and don't wish to see more power enter an already over supplied local market. This process can be stalled not stopped and they will likely have their transmission issues rectified within 18 months. They will then be looking to sell power into neighbouring states. With no cyclones and Gujarat at 80%+ net earnings could grow to nearer £40m given the operational leverage inherent in the business.
On some level it is amazing that they make any profit at all given 80% of power is supplied by local government who are subsidised by state government. In the private sector OPG enjoy higher margins and therefore higher returns than their competition, so they have to be given credit for that!
Longer term the subsidy regime might change. What will really be the kicker is if we get a bear market in coal prices.
The solar business works on long term offtakes and is a competitive tender process. I understood them to have tendered on 700MW and they have been successful on 200MW. Debt equity is 70/30. They maintain the equity IRR is 18% given borrowing rates at 11%. We shall see...! Load factors will be 20%. Some people are bidding for less, so it will be a tough business to grow with a guaranteed return profile. I felt they were doing to tip their toe and give green credentials to the business and in the scheme of things the equity investment is quite marginal. Solar will contribute earnings the year after next, that is to say March end 2019.
They clearly want to grow the business and they maintain they could further gear the current balance sheet to bring £150m to the table. Clearly lots of private operators are in all sorts of trouble. What they will not be doing is buying superficially large MW capacity which is locked to provide power to local government at unprofitable rates. They are not going to jeopardise their status as one of the few private sector operators who actually make a decent return on capital ~ 15%+.|
the original goldbug
Respectfully I disagree with your thoughts. The interest payments actually rise, as free cash is not being used to pay down debt, thus negatively impacting upon the p&l. However it frees up cash allowing for new investments, which over time build earnings, provided the return on capital from new investments is greater than the interest rate they are paying on their debt.|
the original goldbug
As you well know,you only lose money when you sell your shares for less than what you paid for them. Between Oct and Dec 2016 I sold a significant number of shares all at a profit; some were on a quick buy & sell basis, which I expect others to have done and are doing so of late. Others have simply sold and taken the loss. What I now hold are making a paper loss, but I will hold these until they return to profit. The numbers in Ballychan's post illustrate the potential.
Trading the shares are now getting to be risky as those who have sold more recently at a quick profit are finding having to pay notably more to get back in as the share price continues to rise.|
|I came across this Buy recommendation dated April 2013 - buy at 57.25p. It gave highlights of "Results for the six months ended 30th September 2012 highlighted a PBT of £2.51m with revenue of £17.8m."Now fast forward 3 years to half year Sep 2016 and PBT is £18m with revenue of £118m, so nearly a 10 fold increase but we're valued lower by the Market! Shows how undervalued this currently is. The fundamentals will shine through, just need patience and the seller to be finished. http://www.shareprophets.com/views/139/buy-opg-power-ventures-at-5725p|
|Forget sellers Azalea. Those who bought at much higher levels when it was a stonking buy are still suffering 2nd degree burns. Surely you have lost money.|
|well, let's hope it can maintain the momentum...|
|Sellers are continuing to get their fingers singed, anyone(big or small) following as the share price recovers, will get them burned.|
|On Monday Premier Energy & Water Trust PLC reported their results. OPG is their largest holding at 8% of their total investments (£4.475m valuation), and they had this to say:
"PEWT’s largest investment, OPG Power Ventures (“OPG”), performed exceptionally well operationally, fully commissioning its second coal fired power station in Gujarat. As such interim results for the six months to September were strong, with a 40.8% increase in earnings, together with the declaration of a maiden dividend. OPG’s next investments will be in solar power, which should provide highly visible long term earnings. Despite the company’s positive development, its share price fell by 24.7% over the year."|
|Fingers crossed the forced seller is now completely out.FX rates are in OPGs favour and with likely interest rate cuts in 2017 this will help their bottom line. "Low inflation and crude oil prices will enable the Reserve Bank of India, or RBI, to reduce interest rates in 2017, perhaps by up to 0.50%0.75%."|
|going for it now, about time!|