07:00 Tue 22 Jun 2021
OPG Power Ventures - Trading update for the year ended 31 March 2021
OPG Power Ventures plc
("OPG", the "Group" or the "Company")
Trading update for the year ended
OPG Power Ventures plc (AIM: OPG), the developer and operator of power generation plants in
Summary
For the year ended
· Total generation (including deemed) of 2.11 billion units (FY20: 2.72 billion units), reduction in generation is primarily due to the COVID-19 induced nationwide lockdown in
· Plant Load Factor ("PLF") was 58 per cent, compared with FY20 PLF at 75 per cent;
· PLF for
· Average tariff for the year was
·
· Subsequent to
COVID-19 and the Indian Economy
· Second wave of COVID-19 has surged across
· Currently COVID-19 cases are reducing and unlocking processes have been initiated by various State Governments, in phases;
· World Bank has projected
· On
"Despite the disruption caused by COVID-19, OPG delivered very strong cash generation and achieved a significant reduction in debt during the year and has also continued its strategy of deleveraging the business.
"We expect to meet the market expectations for our FY21 profit after tax and cash generation.
"We continue to work tirelessly to implement plans to limit the business disruption to OPG and the associated human, financial and commercial consequences of the second wave of COVID-19. We would like to thank all of our employees, investors, vendors, banks and all stakeholders for the incredible support we have received during these unprecedented and extraordinary times."
For further information, please visit www.opgpower.com or contact:
OPG Power Ventures PLC |
+44 (0) 782 734 1323 |
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Cenkos Securities plc (Nominated Adviser & Broker) |
+44 (0) 20 7397 8900 |
Russell Cook / |
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Tavistock (Financial PR) |
+44 (0) 20 7920 3150 |
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Deleveraging
In 2018, the Board took the decision to focus on our profitable, long-life assets in
The increase in equity value, since the adoption of this strategy is:
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FY18 - FY20 |
FY21* |
Term loan principal repayments |
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Addition to shareholders value as a result of term loan principal repayments (pence per share)** |
15.6p |
2.0p |
* Based upon INR/GBP closing exchange rate at
** based on 400.7 m of Ordinary Shares
Term loan and non-convertible debentures interest and principal repayments during FY21 amounted in aggregate to
As at
Group Operations Summary
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FY21 |
FY20 |
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Generation (million kWh) |
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414 MW Generation (MU) including auxiliary |
1,701 |
2,468 |
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Additional "deemed" offtake |
406 |
248 |
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Total Generation (MUe)1 |
2,107 |
2,716 |
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Reported Average PLF (%)2 |
58% |
75% |
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Average Tariff Realized (Rs) |
5.52 |
5.67 |
Note:
1. MU - millions units or kWh; Mue - millions units or kWH of equivalent power
2. Reported Average PLF based on Mue
Total generation at the
The average tariff realised during FY21 was
Subsequent to
Coal and Freight costs
The average landed coal price was £42.67 (
Over last several months the prices of thermal coal and freight have surged primarily due to increased imports of coal and other goods by
62 MW Karnataka solar projects
All plants are operational and have met all critical operating metrics. A Capacity Utilisation Factor ("CUF") for the solar projects of 19.2 per cent was achieved in FY21 (FY20: 18.5 per cent). OPG owns a 31% equity interest in 62 MW Karnataka solar projects.
COVID-19 and Indian Economy Update
A second wave of COVID-19 has surged across
The Ministry of Finance in its monthly economic report said that the impact of the second wave of the coronavirus pandemic on the economy is likely to remain muted as compared to the first wave in 2020, even though caseloads and fatalities are much higher. This is because the administrative response is likely to be confined to the regional/local lockdowns and containment zones. Despite COVID-19, the World Bank has projected
Power Sector
Power consumption in the country grew nearly 41 and 8 per cents in April and
On
Environmental, Social and Governance ("ESG") strategy development
OPG continues to develop its ESG strategy which, among other matters, will include objectives to reduce its carbon footprint. As part of this strategy, the Company is evaluating various options to increase its renewable energy asset base and to establish joint ventures to roll out various energy transition technologies. These initiatives will ensure that OPG delivers year-on-year improvements to reach the Company's emissions reduction targets in the medium and longer-term and should generate attractive returns for shareholders.
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 meet market expectations for our FY21 profit after tax and cash generation.
Robust cash collections, continued deleveraging and the extension of the deadline for meeting emission norms have significantly strengthened the Company's balance sheet and its liquidity position.
Notwithstanding the volatility in coal prices and freight, the Company's medium-term and long-term fundamentals remain unchanged with strong cash flows and a reduction in debt enabling the long-term profitable business model and sustainable returns to shareholders.
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