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

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.”





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

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