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OPG Power Ventures PLC: DEEP DIVE

OPG Power to push on again as coal price pressure eases

OPG owns a 414Mw capacity coal-fired power station at Chennai, Tamil Nadu
OVERVIEW: OPG The Big Picture
Things are starting to hum nicely again at OPG


  • OPG owns a 414Mw capacity coal-fired power station at Chennai, Tamil Nadu

  • There is also a 62Mw solar power development north of Bangalore in Karnataka

  • Production in nine months to December rose by 4.5% to 2.15bn units (Kwh)

  • Seaborne coal prices have eased since September

  • Tariffs rose by 7% in October


How is it doing

India-focused OPG Power Ventures PLC (LON:OPG) has re-grouped following major disruption from a spike in the price of seaborne coal.

At the half year, the ongoing business saw a £6.5mln profit from £2.1mln, helped by improved tariff prices and market coal prices.

Revenue totalled £77.9mln, up from £66.5mln.

In February, the group reported it would meet profit targets this year (March 2019) even though the largest of the four units at Chennai had temporarily shut down as a by-pass valve at the generator took longer than expected to repair.

Underlying profit [EBITDA] this year to March is expected to be around £34mln (after £14.4mln in the first half) and £40mln in 2020.

Coal prices, the plant’s primary feedstock, rose by 2% over the nine months to December but since September have seen a 4% decline.

Total debt at the period end was £87.5mln including term loans of £76mln.

OPG paid back the loan on the first generator at Chennai in December and is on course to repay the term loans on schedule.

“Looking forward to FY20, the company is expected to benefit from robust tariffs and the projected level of coal prices,” said the statement.


What the boss says: Dmitri Tsvetkov, CFO

"In five years time, the Chennai plant will be paid off and generating underlying profits of £40mln per year for the next 30-35 years."





Inflexion points

  • Chennai IV restart

  • Further deleveraging – term loans are expected to reduce to £69.1mln by 31 March

  • Return to cash dividend compared to scrip currently


Blue Sky

Indian economy is expected to be the fastest growing major economy resulting in high GDP growth and higher demand for electricity.

GDP is set to grow 7.5% in 2019 yet consumption of electricity in India is low by western standards at 1,075 Kwh per person.

Power demand is forecast by OPG to grow 6-7% annually over next five years

Coal prices have reduced by 4% from the end of September 2018 to the third week of February 2019.

Expansion of solar capability

View full OPG profile View Profile

OPG Power Ventures PLC Timeline

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