TIDMOPG
RNS Number : 2878N
OPG Power Ventures plc
29 January 2021
29 January 2021
OPG Power Ventures plc
("OPG", the "Group" or the "Company")
Trading update for Nine Months of FY21
Summary
For the nine months to 31 December 2020:
-- Total generation of 1.47 billion units (2.09 billion units for nine months FY20);
-- Plant Load Factor ("PLF") for the period at Chennai was 54%
(77% for nine months FY20); for the month of December 2020 PLF was
71%;
-- Average tariff for nine months FY21 was Rs 5.52 (Rs 5.67 for nine months FY 20);
-- GBP8.2m term loan principal repayment, representing 2.04
pence per share added in value to shareholders' equity;
-- Net debt, including NCDs, reduced by 64.6% to GBP18.9m (GBP53.4m at 31 March 2020);
-- The Company plans to undertake a number of initiatives to
gradually reduce and offset carbon emissions from operations;
-- Indian economy is steadily recovering from COVID-19 pandemic
and lockdown; IMF has projected a rebound in the Indian economy
with 11.5% growth rate in FY22.
Arvind Gupta, Chairman, commented: "We are pleased to report
continued improvement in the Company's operations as a result of
the recovery of the Indian economy post the COVID-19 pandemic and
the lockdown. Despite the disruption caused by COVID-19, OPG
delivered very strong cash generation during the reporting period
and has also continued its strategy of deleveraging the
business.
"Based on the performance in the first nine months of FY21 we
expect to meet the market expectations for our FY21 results and to
provide returns to our shareholders by resuming dividends based on
FY21 results."
For further information, please visit www.opgpower.com or
contact:
+44 (0) 782 734
OPG Power Ventures PLC 1323
Dmitri Tsvetkov
Cenkos Securities (Nominated Adviser +44 (0) 20 7397
& Broker) 8900
Russell Cook / Stephen Keys
+44 (0) 20 7920
Tavistock (Financial PR) 3150
Simon Hudson / Nick Elwes
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the UK version of the EU Market Abuse Regulation (2014/596) which
is part of UK law by virtue of the European Union (Withdrawal) Act
2018, as amended and supplemented from time to time.
Deleveraging
In 2018, the Board took the decision to focus on our profitable,
long-life assets in Chennai, and to prioritise deleveraging the
business to enhance and increase the value to shareholders' equity.
This strategy, we believe, will deliver value to shareholders with
free cash flows providing significant returns to our shareholders
and opportunities to grow the business further.
The increase in equity value, since the adoption of this
strategy is:
FY18 - FY20 9m FY21*
--------------------------------------------- ------------ ---------
Term loan principal repayments ( GBP
million ) 60.9 8.2
--------------------------------------------- ------------ ---------
Addition to shareholders value as
a result of term loan principal repayments
per share (pence) 15.6 2.0
--------------------------------------------- ------------ ---------
*Based upon INR/GBP closing exchange rate at 30 September 2020
of GBP1 = INR94.74
The Board believes that the strategy of maintaining operational
excellence and the paying down of borrowings is for the clear long
term benefit of all our stakeholders.
Operations Summary
Chennai - Total generation maintained at 1.47 billion kWh and
PLF of 54%
Nine Months Nine Months FY
FY 21 FY 20 31 Mar 2020
Generation (million kWh)
------------ ------------ -------------
414 MW 1,141 1,889 2,468
Additional "deemed" offtake at
Chennai 327 204 248
-------------------------------- ------------ ------------ -------------
Total Generation (MUe)(1) 1,468 2,093 2,716
-------------------------------- ------------ ------------ -------------
Reported Average PLF (%)
------------ ------------ -------------
414 MW 54% 77% 75%
------------ ------------ -------------
Average Tariff Realized (Rs)
------------ ------------ -------------
414 MW 5.52 5.67 5.67
------------ ------------ -------------
Note:
(1) MU / Mue - millions units or kWh of equivalent power
Total generation at the Chennai plant, including deemed
generation, in the nine months of FY21 was 1.47 billion units,
29.9% less than in the nine months of FY20. This decrease in
generation was primarily due to decreased demand by commercial and
industrial (C&I) clients, as worldwide economic activities
slowed down due to the COVID-19 induced lockdown. Average tariffs
realised in the period were Rs 5.52 per kWh (nine months of FY20:
Rs5.67). The decrease in tariff realisation is primarily due to the
COVID-19 impact.
Focus on Maximising Asset Performance and Deleveraging
The average landed cost of coal was GBP40.6 (Rs 3,874) per tonne
in the period, ( GBP47.9 or Rs 4,305 per tonne in FY20). This
reduction in coal cost is primarily due to moderation in
international coal prices during the first half of FY21.
Net debt (total borrowings (GBP43.8 million) minus unrestricted
cash and cash equivalents (GBP24.9 million), reduced by 64.6% to
GBP18.9 million (GBP53.4 million at 31 March 2020). The remainder
of the Chennai plant term loans are scheduled to be fully repaid by
Q2 2024.
Environmental, Social and Governance ("ESG") strategy
development
OPG has begun the development of an ESG strategy which, among
other matters, will include objectives towards reducing its carbon
footprint. OPG recognises that a comprehensive decarbonisation
strategy is critical. The Company aims to identify and undertake
various initiatives that will reduce and offset carbon emissions
from its operations and to be aligned with the UN Sustainable
Development Goals.
As part of this strategy the Company is evaluating various
options to increase its renewable energy assets base and to
establish joint ventures to roll out various energy transition
technologies whilst also evaluating participating in an innovative
blockchain based carbon credits platform. These initiatives will
ensure that OPG delivers year-on-year improvements to reach the
Company's emissions reduction targets in the near and longer-term
and should generate attractive returns for shareholders.
The Company is planning to present its ESG strategy along with
its FY21 annual results.
Board changes
The Company announces that it intends to re-appoint Mr Michael
Grasby as a non-executive director subject to completion of the
required due diligence.
Mr Grasby previously served on the Board of OPG from May 2008 to
November 2019. During that time he supported the Company through a
period of immense change and progress providing guidance and
contributing to the implementation of the Company's technical,
organisational and health and safety systems.
The Board believes that Mr Grasby's experience will be
invaluable for the Company during this exciting period of recovery,
as we look to reposition our business to benefit from
decarbonisation and energy transition diversification.
The Global, Indian Economy and Indian Power Sector
The COVID-19 pandemic has hit economic growth across the globe.
A recent IMF report, estimates global growth contracted by 3.9% in
2020 and will bounce back to 5.5% in 2021.
The IMF has projected a strong rebound in the Indian economy
with 11.5% growth rate in FY22, making the country the only major
economy of the world to register double digit growth this year
amidst the COVID-19 pandemic. Revising its figures, the IMF said
that in FY21, the Indian economy is now projected to contract by
8%.
Indian power consumption per capita was 1,208 kWh in FY20. It is
expected that this will catch up with developed economies with
similar social and economic conditions over time, providing
significant demand and growth potential to the sector. As per ICRA
FY22 Power Sector Outlook, dated January 2021, Indian electricity
demand is likely to grow by 6.0% to 7.0% in FY2022 supported by a
favourable base effect and the expected recovery in demand from the
commercial and industrial (C&I) segments. India has moved up 14
positions to rank 63 globally, its highest ever, in the World
Bank's annual Ease of Doing Business table in the latest World
Bank, Doing Business 2020 Report.
Outlook
Despite the disruption caused by COVID-19, and as a result of
our strategy of maximising operational performance and deleveraging
we expect that the Company will demonstrate good profitability in
FY21 and meet market expectations for our FY21 results.
This Board anticipates that OPG will provide returns to the
Company's shareholders in near term by resuming dividend payments
in accordance with the Company's dividend policy based on the FY21
results.
Medium-term and long-term fundamentals remain unchanged and
following a post-COVID-19 recovery, the Company expects to prosper
as management seeks to deliver its long-term, profitable and
sustainable business model.
-ends-
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END
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January 29, 2021 02:00 ET (07:00 GMT)
Grafico Azioni Opg Power Ventures (AQSE:OPG.GB)
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Da Nov 2024 a Dic 2024
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