Interim results from India-focused generator OPG Power Ventures plc (LON:OPG) confirmed what the market had been primed to expect - that a strong operational performance had been offset by higher seaborne coal prices.
It said its designation as a ‘captive’ producer of electricity to the industrial sector in Gujarat ‘reaffirms’ the company’s business model there and should strengthen its cash flow.
In the same announcement it added that it was making significant progress in the Indian states of Gujarat and Tamil Nadu on receivables and is still hopeful of collecting certain monies it is owed by the end of the current financial year.
“Healthy operational performance, forecast reduction in coal prices and anticipated tariff increases in Tamil Nadu keep us optimistic about the prospects for the company in full-year 2019,” said Arvind Gupta.
In the six months to September 31, total generation rose to 2.39bn units from 2.37bn in the corresponding period last year. Plant load factor at Chennai and Gujarat were 73% and 81% respectively.
Gearing was 55%, with OPG’s net debt falling £12mln in the period under review.
Investors will receive a 0.72p dividend, with a number taking the payout in shares instead of cash.
Revenues for the six months were flat at around £114mln, giving underlying earnings of £22mln, down from £42.1mln and reflective of that sharp rise in coal prices.
At the pre-tax level, OPG recorded a £2.9mln loss. Chairman Gupta told investors he expects a return to profitability in the next financial year.
Diversifying its portfolio, the company is developing a 62 megawatt solar project in Karnataka, south-western India, which is due to be commissioned in 2018.