Sign up United Kingdom
Proactive Investors - Run By Investors For Investors
Why invest in OPG?
OPG Power Ventures Plc.: THE INVESTMENT CASE
INVESTMENT OVERVIEW

OPG Power shifts focus to Chennai and solar

Efforts in future will be directed toward the Chennai power plant and OPG’s growing solar capacity
pylon
INVESTMENT OVERVIEW: OPG The Big Picture
Tariffs have been raised at Chennai

India-based power utility OPG Power Ventures PLC (LON:OPG) has undertaken major surgery after a tough year.

One of its two power stations, Gujarat, has been written off after a series of ongoing disputes over payment and rebates with the provincial government and power distributors meant it missed interest and debt repayment deadlines.

Chennai and solar the future

OPG will not put any more money into Gujarat and its involvement now is effectively at an end.

Efforts in future will be directed toward the Chennai power plant and OPG’s growing solar capacity.

READ: OPG Power draws line under Gujarat power station, to focus on Chennai and solar

Profits here for the year to March were £6.2mln while revenues rose by 3% to £140mln.

The Gujarat write-down, however, meant a loss for the year of £100.9mln (£23.1mln profit).

Another of the recent issues has been a sharp rise in seaborne coal prices, one of the key raw material inputs for OPG’s power stations though encouragingly for Chennai, the price has fallen back recently.

Coal pressure easing

The landed cost of coal rose 32% over the year but has dropped 18% since August and is forecast to fall by a further 20% to March 2020.

Chennai’s output rose 6% in the year March to 2.49 million kWh.

Since the year end, OPG adds it has negotiated a 5% increase in sales tariffs for the 2019 financial year and most of its group captive customers have renewed three-year contracts.

The group expects to achieve at least a 4% increase in sales tariffs in the following year.

In addition, the loan on the first generator built at Chennai is on schedule to be paid back fully in December.

Solar ramp-up

Four solar projects at Karnataka, meanwhile, are ramping up to full capacity of 62Mw.

Borrowings at the end of the March were £93.5mln, down from £321mln, which reflects the absence of the Gujarat loans.

To preserve cash, there was a scrip rather than cash dividend for the year.

Arvind Gupta, executive chairman: “We are already benefitting from reduced coal prices following the FY18 spike and expect to be able to demonstrate a clear path to profitability in FY19.

“Our focus will remain on repaying the long-term debt on the Chennai plants and look forward to Unit 1 being debt free later this year with the remaining units following within five years.”

View full OPG profile View Profile

OPG Power Ventures Plc. Timeline

Big Picture
October 12 2018

Related Articles

1537919971_Centrica-Lynn2_opt.jpg
September 26 2018
The company expects its oil and gas exploration efforts will add to shareholder value.
waste
Thu
If contracts can be agreed, they might result in the installation of Powerhouse’s DMG technology at multiple locations
oil and gas operations
August 02 2018
The agreement includes up to US$35mln in costs regarding the development of Aminex’s remaining 25% interest in the Ruvuma PSA, which would include the Ntorya project

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use