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LONDON (Alliance News) - OPG Power Ventures PLC on Monday said it swung to a loss in its most recent financial year, as a result of higher coal prices and large provision related to its exit from the Gujarat power plant.
The stock was down 26% early on Monday at 10.60 pence per share.
The Indian power assets developer said it swung to a pretax loss of GBP1.1 million in the year to the end of March, compared to GBP31.7 million profit reported a year earlier.
Meanwhile, revenue rose to GBP140.1 million from GBP136.2 million year-on-year.
OPG said the Chennai plant's power generation during the year totalled 2.49 billion kilowatt hour, up 6% year-on-year. However, the average landed cost of coal was 32% higher year-on-year, which had a significant impact on profitability.
Following a strategic review, the company decided to deconsolidate its Gujarat plant and focus on its Chennai plant. As a result, OPG disposed its 5% holding in the Gujarat special-purpose vehicle, leading to GBP46.3 million provision against the company's receivable balances from the Gujarat SPV and financial securities pledged with lenders of Gujarat SPV.
The company declared a full-year dividend of 1p per share, up from 0.98p paid the year prior.
Over the period, OPG said it has invested in four solar projects at Karnataka, which have delivered 62 megawatts, and are being ramped up to full capacity.
Looking forward the company said it saw a 5% increase in sales tariffs for financial year 2019. It also renewed its three-year contracts with the majority of its captive customers.
In addition, OPG noted an 18% decline in the coal price in the first half of its financial 2019 and said it expects about 20% reduction by March 2020.
"This was a year of significant transition for OPG," explained Executive Chairman Arvind Gupta.
"We have decided to focus on the profitable Chennai SPV and have drawn a line under the Gujarat SPV which continued to experience liquidity stress due to the cascading impact of historic external issues, coupled with high seaborne coal prices," added Gupta.
