Last checked at 5 Nov 2015 07:00
5th November 2015
OPG Power Ventures plc
("OPG", the "Group" or the "Company")
Trading update for the quarter ended 30th September 2015
Further Transformational Developments
OPG (AIM: OPG), the developer and operator of power generation plants in India, announces the following trading update for the quarter ended 30th September 2015 ("Q2 FY16").
Highlights
· 600 MW in generation (270 MW this time last year) and expected to be 750 MW by Jan 2016
· H1 volumes up 55 per cent versus H1 last year
· Oct 2015 run-rate volumes 80 per cent. higher than Oct 2014 and ramping up
· Chennai plant sales mix transformed:
o 257 MW with industrial customers for three years;
o 80 MW with TANGEDCO for 15 years; and
o 77 MW on short term
Operations Summary
The following table summarises the operations of our plants during the period under review:
Parameter | Quarter ended
| Half Year ended | Year ended | |||
30 Sep 15 (Q2 FY16) | 30 Jun 15 (Q1 FY16) | 30 Sep 14 (Q2 FY15) | 30 Sep 15 (H1 FY16) | 30 Sep 14 (H1 FY15) | 31 Mar 15 (FY15) | |
Generation (million kWh) | ||||||
414 MW Chennai plant | 589 | 472 | 425 | 1,061 | 902 | 1,861 |
300 MW Gujarat plant |
182 |
156 |
NA |
338 |
NA |
NA |
Total (million kWh) | 771 | 628 | 425 | 1,399 | 902 | 1,861 |
1. kWh =1 unit
Generation up 55 per cent v H1 last year and Oct 2015 run-rate volume c80 per cent higher than Oct 2014
Both new units, 180 MW at Chennai and 150 MW at Gujarat, continued to ramp up and as a result average Plant Load Factor ("PLF") from 1st Oct to 28th Oct 2015 across the Company's Chennai and Gujarat plants exceeded 70 per cent, corresponding to a volume increase of approximately 80 per cent compared with the same period of Oct 2014.
Chennai
Average PLF for the plant for the quarter ended 30th September 2015 was 70 per cent, principally on account of the recently commissioned 180 MW unit continuing to ramp up and also due to temporary limitations in the availability of transmission grid capacity in Tamil Nadu during the quarter. Grid capacity affected both thermal and renewable generators in certain parts of Tamil Nadu during the recent wind season. Last year we took a major planned shutdown during the comparable period.
From October 2015 the Company has entered into three year, agreed volume contracts directly with industrial customers for 257 MW of capacity. Prices achieved on sales to industrial customers are linked directly to regulated industrial tariffs in Tamil Nadu which can vary subject to the state regulator and are above typical nationwide average long term power tariffs. The sales mix at the Chennai plant is now as follows:
Capacity (Gross) | Customers Type | As % of sales | Duration from contract start | As % of sales |
257 MW
| Industrial customers | 62% | 3 years (to 2018) | 62% |
80 MW | TANGEDCO | 38% | 15 years (to 2029) | 19% |
77 MW | TANGEDCO | Short term | 19% |
The Directors believe this sales mix is transformational for the Company as it enhances the visibility of OPG's revenues at Chennai without compromising on pricing whilst helping the Group achieve increased diversification of its customer base as illustrated in the table above. Notably, supplies to industrial customers are not affected by constraints to grid capacity.
Gujarat
PLF for the quarter ended 30th September was 55 per cent and has risen to 70 per cent and 86 per cent in September and the month to 28th October 2015 respectively. As previously reported, the construction of the multi-circuit transmission line established by GETCO for evacuation of the 300 MW Gujarat plant was completed during the quarter and the second 150 MW unit of the plant is expected to be in operation by January 2016. Until then, as the commissioning date under the project lenders' agreements is regarded as the date of commissioning of the full 300 MW plant, the results of the Gujarat plant are being capitalised in pre-operative project cost.
Coal cost
International coal prices have remained subdued during the period while the Indian Rupee has moved in the range of 62 to 66 to the USD during the same period. The delivered imported coal price during H1FY16 was approx. 11 per cent lower than in the full financial year 2015.
Outlook
In summary newly added capacity is transforming our volumes. New assets continue to ramp up whilst existing assets have continued to perform consistently well. Even with the more gradual growth in contribution from the Gujarat plant, we continue to expect earnings for the current year to be in line with expectations.
Arvind Gupta, CEO, added: "The developments in sales mix add visibility to our transformational growth. If we can maintain our course, my colleagues and I on the Board look forward to the prospect of executing further expansion plans and introducing a dividend policy in the next few months when we expect the Gujarat plant to be fully operational."
For further information, please visit www.opgpower.com or contact:
OPG Power Ventures PLC | +91 (0) 44 429 11 211 |
Arvind Gupta / V Narayan Swami / Ajay Paliwal |
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Cenkos Securities (Nominated Adviser & Broker) |
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Stephen Keys / Camilla Hume | +44 (0) 20 7397 8900 |
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Tavistock |
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Simon Hudson / James Collins | +44 (0) 20 7920 3150 |
About OPG
OPG operates and develops power plants in India, principally under the group captive model, and currently has as an operational capacity of 750 MW. In the year ended 31 March 2015, the Company operated 270 MW of generating assets and generated revenues of approximately £100 million, EBITDA of £33.4 million and earnings per share of 4.91 pence.
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