Opg Power Ventures Share Discussion Threads

[azalea] 01/9/2017 13:13

jeffian

3 years ago the share price was 95p, on the 10/11/2014 the bid was 110.5pr with brokers forecasting an share price of 130p+, not exactly a bad reason for my being upbeat. If you had read the FY results reported 2/6/2015 and the CEO/Chairman's comments,there was as far as I could see little to warn of the subsequent fall in the share price Since that report the capacity and output has risen dramatically; yet the price had fallen circa 60%, even before the latest warning of higher coal prices. The problem concerning the 'evacuation' of electricity due to the failure of the government own company to build the pylons and connections turned out to be a much bigger issue than first thought/expressed by the BoD. You pays your money and takes your chances.

Your comments in post 3449 were quite unmistakably pointing at me, when you wrote suggesting I should look at the graph in the header and my posts. What other conclusion would you draw?

[andycapp1] 01/9/2017 12:54

All good but kind of so what! The rating is terrible, there are now more sellers and the rating wont recover quickly as increasingly this is toxic. It's the what else lies round the corner issue that will dog them for a long time. My guess is the shares will go lower before they recover that assuming all is okay with the loan covenants on which I have no visibility.

[tiltonboy] 01/9/2017 12:12

Forecast revisions. With positive plant load factor ratios and a stronger Indian Rupee FX rate against Sterling, but lower power sale average pricing, our revenue expectation is broadly unchanged at £230m. Our gross margin forecast for the full year falls by 13 percentage points to 29.6% (we allow for a steady recovery in future years into the 40% range, which could happen much faster given coal price volatility) and this weighs on relatively fixed operating costs. Our FY2018F adj. EPS estimate thus falls back from 7.0p to 1.0p.

[andycapp1] 01/9/2017 12:06

Azalea I'm not sure the comment "you only have yourself to blame" is quite correct. We - shareholders - place enormous responsibility on the Execs aided by the NEDs to run the company responsibly and to maximise shareholder value. They have clearly not done so. OPG is an IPP - not quite a utility as it doesn't have a supply business but instead has a series of off take agreements for its power, so PPAs. It has a lot of debt - over £200m which is non recourse to the Holdco or the Group - and a now small and ever diminishing slug of equity. It has earnings expectations in the market and it has consistently said 7p+ and it then has dividend expectations as a result. It has said it will pay out x% of its earnings. It also wants to - and I disagree with it here - invest in solar. So as a responsible IPP it should strive, at all costs, to ensure that its debt is okay and that its highly geared equity earnings - highly geared because of its capital structure - are met. The CEO has said on many occasions that he believes coal prices are in structural decline and I suspect this, even subliminally, impacts its hedging strategy. It has failed to deliver for years and thus its rating has been impacted. Any slippage will annihilate its already fragile rating and this has happened. It should look at its capital structure, its rating, its off take contracts and its hedging and put in place a strategy that delivers or as close to delivers market expectations. It has clearly not done so. It has adhered to a fundamental belief that coal prices are in structural decline and has been utterly caught out. Result its fragile rating has imploded, its earnings have collapsed and its capital structure is beginning to look terrible. Now I don't know what covenants it has on the various loans but if they have failed to protect these then they are idiots. If they have enough headroom come what may on coal then they should let 2018 run without hedging and see if they can recoup some of the earnings disaster. But this share - and I remain a holder - now needs some serious management and NED attention. Its risk management systems are clearly appalling as a result of which its EBITDA and EPS have collapsed. Gupta clearly is not up to the job and they need change.

[azalea] 01/9/2017 10:22

Jeffian
If you think the comments of a poster on ADVFN can influence the share price of a company; then it is you that should apologise; for being stupid beyond belief. If you are making a real/paper loss on your purchase of OPG, then you have only yourself to blame.

The mistake I made was quite obvious, which if you had access to OPG history, you should have pick up on; Interim results 2017 being the clue; which ultimately led me to realising my mistake.
That said; whether Shore Capital's forecast of a 1p Eps for 2018, is proven to be correct, remains to be seen. Apart from the house broker, I am not aware if SC covers OPG. Tiltonboy, has very kindly responded to my request and hopefully will be able to track down where he saw the latter's forecast.

[smithless] 01/9/2017 09:41

Well I joined them and sold 50% of my total holding. I will keep the other 50% in my longer term investments account. Dead money in the short to medium term. Gupta has to stand down as CEO, as he isn't an operations man, Prashant Goyal Head of Coal Procurement, should simply be sacked. I will convey this to the smooth taking Ajay Paliwal, Strategy Director, if he dares to show his face to private clients after the prelims.

[andycapp1] 01/9/2017 08:31

Another seller has joined the fray. That's the trouble this has now become toxic as one management failure after another impacts the rating. V depressing and entirely of their own making. I think their hedging strategy has been very poor.

[andycapp1] 31/8/2017 19:28

Correct the impact is in 2018. I suspect they've panic hedged to at least lock in 1p. If they have that is outrageous frankly. They should let 2018 revert to spot. They have the financial headroom I think.

[jeffian] 31/8/2017 19:03

You could have ended that post after the first 5 words, looking at the graph in the header and your posts over the same period!

[azalea] 31/8/2017 18:59

My apologies to all concerned, I misread the year for the 1p Eps; thought it was odd. too much sun perhaps.

[tiltonboy] 31/8/2017 16:13

I get a daily note; I will try and find it.

[john09] 31/8/2017 16:08

It's not 2017 EPS that's impacted it's 2018 that's been revised to 1p. So I'm not sure what you're waiting to find out on 25/9

[azalea] 31/8/2017 15:50

tiltonboy your 3415 of 3444

Reference: Shore Capital Eps forecast for OPG. Can you tell me where you saw this forecast?

[smithless] 31/8/2017 15:19

On this site by someone call tiltonboy - so until I get an update take with a pinch of salt, although Shores have been somewhat negative for a while, so wouldn't be supprised

[azalea] 31/8/2017 15:08

smithlesS

If only out of curiosity, when an where did you see Shore Capital's FY 2017 forecast for Eps.

[azalea] 31/8/2017 13:15

We shall simply have to wait until the 25/9, to see if Shore Capital is correct.

[azalea] 31/8/2017 12:32

smithless

To cut a long story short, given the numerous factors in play when agreeing contracts running for several years to supply a range of customers large and small, in some cases under the watchful eyes of local authorities; who could predict that a year or so later, coal prices would rise as high as they have? The likes of OPG, cannot turn round and say to customers sorry folks, the contract we signed is no longer valid because of the rise in steam coal prices and we are going to charge you more for electricity. If the UK 'big six' had signed contracts with customers for supplying electricity and/or gas, a few years ago; probably a few could be out of business by now. The hike in coal prices is relatively temporary. Who knows, if contracts with OPG come up for renewal 2018, higher priced electricity contracts could be the order of the day.

[the original goldbug] 31/8/2017 12:08

Smithless, utility companies charge their customers more when their input costs rise no?

Sure they take the hit for a while but not indefinitely.

[turbocharge] 31/8/2017 11:36

Plenty of buyers out there. So far 688,354 buys and 74,537 sells.

Wondering whether I should follow the herd and take a punt...

(Have no knowledge of this company)