India

India

Suzlon's earnings, installations hit by auction shift

INDIA: Suzlon made a net loss of INR 3.21 billion ($47 million) in the first quarter of India's financial year, down from an INR 900 million-profit one year earlier.

Manufacturers such as Suzlon have reported reduced turbine sales and installation figures amid India's shift to the auction system
Manufacturers such as Suzlon have reported reduced turbine sales and installation figures amid India's shift to the auction system

Its earnings before interest, taxation, depreciation and amortisation (Ebitda) of INR 770 million, meanwhile, marked an 83% fall from the same period the previous year.

The Indian company stated this was "primarily due to lower operating leverage" in its first quarter results.

The manufacturer’s revenue of INR 12.72 billion between 1 April and 30 June fell 50% year-on-year. 

It executed 155MW of orders during the first quarter — down 52% year-on-year. The company stated the reduced volume was due to "back-ended auctions" in the previous financial year.

However, Suzlon claimed it has the "largest backlog in the Indian wind industry" — 1,134MW in firm orders and more than 700MW in framework agreements for which the power purchase agreement has been signed.

JP Chalasani, CEO of Suzlon, explained India’s transition to an auction regime has increased project execution time from nine to 18 months.

This in turn has caused a "temporary delay" in projects being realised, he added.

Chalasani said that there may not be significant commissioning volumes in the financial year ending 31 March 2019, but the industry was set to grow in the following 12 months as "projects won earlier will be executed and new bids are in the pipeline".

He added: "Suzlon is well-positioned to cater to the growing market with its slew of newly launched, technologically advanced products... We are also focussing on select profitable international markets."

Kirti Vagadia, the group’s CFO added that to be competitive under the new auction system, Suzlon would focus on "optimising costs across the board, and further reducing (its) working capital levels".

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