TIDMOPG
RNS Number : 2615Q
OPG Power Ventures plc
26 February 2016
26 February 2016
OPG Power Ventures Plc
Trading update for the quarter ended 31(st) December 2015
750 MW operational, cumulative production up 60%
OPG Power Ventures Plc ("OPG", the "Group" or the "Company"),
(AIM: OPG), the developer and operator of power generation plants
in India, announces the following trading update for Q3, FY16.
Company Highlights:
-- Power off-take and operating levels back to normal post Chennai floods
-- Second 150 MW unit of Gujarat plant commissioned - total operating capacity of 750 MW
-- YTD energy output over 2 billion units, up 60% on prior year
-- Diverse industrial customer base in Chennai resulting in faster cash collection
-- Even after the impact of the Chennai floods FY16 trading
remains within the range of market expectations
-- Focus on ramp-up of 300 MW Gujarat
-- Proposed Investor day - H1 FY17
Macro Highlights:
-- India GDP growth of over 7% p.a
-- Central Government implements key long term reforms to
optimise the operations of State Utilities (the "UDAY" scheme)
Arvind Gupta, OPG's CEO commented: "I congratulate our team in
Gujarat where both of our 150 MW units are now in production. All
of our assets are now operating. Even after the impact of the
Chennai floods, trading for FY16 remains within the range of market
expectations.
"I stated at the interim results that our priorities were led by
the maximisation of our assets and this continues to be the case.
With the Indian economic outlook improving, with subdued fuel costs
and key sector reforms being implemented, we remain positive about
our long term growth outlook."
For further information, please visit www.opgpower.com or
contact:
+91 (0) 44 429
OPG Power Ventures PLC 11 211
Arvind Gupta / V Narayan
Swami / Ajay Paliwal
Cenkos Securities (Nominated
Adviser & Broker)
+44 (0) 20 7397
Stephen Keys / Camilla Hume 8900
Tavistock
+44 (0) 20 7920
Simon Hudson / James Collins 3150
Operations Summary
The following table summarises the operations of our plants
during the period under review:
Quarter ended Nine months Year
ended ended
===================== =============================== ================== ========
31 Dec 30 Sep 31 Dec 31 Mar
15 15 14 15
(Q3 FY16) (Q2 (Q2 31 Dec 31 Dec (FY15)
FY16) FY15) 15 14
===================== =========== ======== ======== ======== ======== ========
Generation (million
kWh)
414 MW Chennai
plant 537 589 484 1,595 1,387 1,861
300 MW Gujarat
plant 282 182 NA 620 NA NA
===================== =========== ======== ======== ======== ======== ========
Total (million
kWh) 819 771 484 2,215 1,387 1,861
===================== =========== ======== ======== ======== ======== ========
1. kWh =1 unit
750 MW operational
The second 150 MW unit at Gujarat commenced operations on 30
January 2016, concluding a near tripling of our operating capacity
from 270 MW just a year ago.
Production Volumes - Cumulative YTD Generation up 60% at Dec 15
v Dec 14
The Company generated 70% more units than in the same quarter of
the preceding year. For the nine months in total, volumes were 60%
higher due to the new capacity introduced at both locations. These
increases reflect the ongoing step change in the scale of our
operations.
Energy generation was 6% higher than the immediately preceding
quarter. This variation was made up of a 9% fall in generation at
Chennai due to the impact of heavy rainfall in December 2015 upon
the grid and upon regional demand, offset by a 54% increase in
volumes in Gujarat as the first 150 MW unit there was being ramped
up. While we estimate the Chennai floods cost us approximately
GBP1.7 million in pre-tax profitability, offtake has now almost
returned to seasonal norms and most importantly none of our people
were hurt and our assets remained fully available throughout. Even
after the impact of December's flood, the Company continues to
trade within the range of market expectations.
Commenced supply under diverse contracts - improved revenue
visibility and cash collections at Chennai
From October 2015, the Company commenced supplies directly to
industrial customers under the multi-year contracts established at
Chennai. In addition, the Company entered into an arrangement with
TANGEDCO, the Tamil Nadu State utility, for 80 MW at a tariff of
INR 5.05 per kWh until May 2016. The weighted average tenure of our
sales contracts at Chennai is now approximately four years, giving
us improved visibility over revenues there. Our strategy of
switching supply directly to industrial customers has led to a
significant acceleration of our cash collections.
Gujarat revenues to grow steadily
As stated in our interim results, the revenues and costs of the
Gujarat plant were capitalised in pre-operating costs until the
commissioning of the second unit of 150 MW, which occurred on 30
January 2016.
Power sales from the Gujarat plant have been to industrial
customers on short term contracts. In our efforts to secure further
diverse and attractive tariff arrangements, the Company has sought
and received permission to access customers in certain states
outside Gujarat. This gives the Company the opportunity to invest
time and effort in marketing to maximise the tariff achieved on its
sales from Gujarat, hand in hand with stepping up the plant's
production over FY17, a strategy designed to help us mitigate lower
prevailing tariffs in Gujarat.
Coal costs subdued
The Indian Rupee has moved in the range of 64 to 67 to the USD
during the period while the delivered unit cost of imported coal
during the same period fell more or less in line with the relevant
coal index.
UDAY
At our interim results, we briefly referred to the introduction
of a new financial restructuring scheme for State utilities
introduced by the Indian government and called "UDAY". The
reduction in finance costs that UDAY would bring about to the large
number of states that have signed up for the optional arrangement
so far is potentially formidable and could greatly improve the
bankability of new projects in the sector. We welcome the
initiative itself as well as the overall direction of travel which
is focused on enabling new power capacity to yield economic
growth.
Investor Day - H1FY17
While global volatility persists, an economic resurgence and
much positive change is being targeted by the current Indian
government to position the country as a stronger, more resourceful
participant in a changing world. The business environment has
become more positive, interest rates and inflation have fallen as
commodity prices have eased while the sector's ills are being
addressed with reforms such as UDAY. Alongside these changes, our
business has completed the transformation we set out to achieve in
2008. During this time, we have increased the profitability,
sustainability and transparency of everything we do - despite many
challenges. It is fitting then that at this juncture the board has
decided to conduct its first investor day to be held in London
during the first half of FY17, soon after our year end results
anticipated in June 2016. As well as presenting our wider
management and operations team, we propose to take shareholders
'under the hood' of the work we have done and the outlook for the
power industry in the longer term, given India's exciting growth
prospects.
About OPG
OPG operates and develops power generation related assets in
India, principally under the group captive model, and currently has
750 MW of assets in operation. In the six months ended 30(th)
September 2015, according to its unaudited results for the period,
the Company generated revenues of approximately GBP56 million,
EBITDA of GBP23.25 million and earnings per share of 3.41
pence.
-ends-
This information is provided by RNS
The company news service from the London Stock Exchange
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