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India

India

High debt cost hits Suzlon's 2011 profit

INDIA: The high cost of maintaining its debt commitments wiped out Suzlon's profits for the past financial year, overshadowing a strong sales growth for the turbine manufacturer.

Suzlon’s revenues for the financial year ending March 31 2012 were US$3.75 billion, up 18% on 2011’s revenues of $3.24 billion. The firm also recorded a strong growth in gross profits, up from $89 million for its financial year 2010/11 to $231 million for 2011/12.

However, this operational success was wiped out by the high cost of maintaining Suzlon’s debts, leaving the firm with a net loss of $86 million.

 "We have delivered a strong improvement in our group performance with a gross profit margin of 33.3%," said Suzlon Group  chief financial officer Kirti Vagadia.

"The net loss for the period stood at Rs 479 primarily due to high interest rates, notional forex [foreign exchange rate] impact and non-cash tax items."

He added that the firm’s top priorities for the coming financial year included meeting debt obligations that are shortly due, and reducing the interest rate burden of the firm’s debt.

Suzlon’s orderbook stood at 5.7GW ($7.4bn) as on 25 May 2012, with an order inflow of 3,817MW over the past financial year. The firm expects to achieve revenues of between $4.8bn and $5bn in the coming year.

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