logo-loader
Energy
OPG Power Ventures PLC

OPG Power to push on again as coal price pressure eases

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

Meter
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

  • Company has hedged 60% of its coal feedstock requirement for year to March

 

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.

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

In an update in April, OPG said that Chennai generated a total of 2.71bn units (Kwh) in the year to 31 March, compared to 2.77bn the previous year after one four units was temporarily shut down for most of the fourth quarter for repair.

The plant load factor at Chennai was 75% over the 12 months, compared with 77% the year before.

Average tariffs were up 10% to 5.41 rupees as a result of tariff increases during the year, while for the whole year the average landed coal price was little moved year-on year at £49.30 per tonne versus £49.40.

OPG’s 62Mw solar power project in Karnataka, north of Bangalore, was commissioned during the year and achieved a capacity utilisation factor of 17%.

The compnay has begun hedging coal costs for the new year and has forward-booked its freight requirements until end-June.

Purchasing swaps on the Chicago Mercantile Exchange, the company has agreed to buy 30,000 tonnes of coal at a price US$39 per tonne, with delivery from July 2019 to September 2019.

 

What the boss says: Executive chairman Arvind Gupta

“The new financial year is expected to benefit from “robust tariffs” and lower coal prices.”

 

Video

 

 

Inflexion points

• Chennai IV restart

• Further deleveraging – term loans have reduced to £69.9mln at 31 March

• Return to cash dividend from scrip currently

• Hedges 60% of coal requirement for year 2019-20

 

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

Quick facts: OPG Power Ventures PLC

Price: £0.15

Market: AIM
Market Cap: £56.29 m
Follow

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events

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...

FOR OUR FULL DISCLAIMER CLICK HERE

Watch

Full interview: Scancell back in the clinic with a phase II trial of its...

Scancell Holdings PLC's (LON:SCLP) Cliff Holloway tells Proactive London's Andrew Scott they've begun the UK arm of the phase II trial of its flagship skin cancer treatment. The trial is testing the safety and efficacy of SCIB1 in metastatic melanoma patients who are also receiving Merck’s...

2 hours, 2 minutes ago

RNS

Second Price Monitoring Extn

2 weeks, 4 days ago

Price Monitoring Extension

2 weeks, 4 days ago

Long Term Incentive Plan

2 weeks, 4 days ago

Final Results

2 weeks, 4 days ago

Notice of Final Results

2 weeks, 5 days ago

Trading Update

on 29/4/19

2 min read