TIDMKSK
RNS Number : 0478H
KSK Power Ventur PLC
26 November 2015
KSK Power Ventur PLC
26 November 2015
KSK Power Ventur plc
("KSK" or the "Group" or the "Company")
Interim Results for the half year ended 30 Sep 2015
KSK Power Ventur plc (KSK.L), the power project company listed
on the London Stock Exchange, with interests in multiple power
plants and businesses across India, announces its interim results
for the half year ended 30 Sep 2015.
Financial Highlights
-- Gross Revenue increased by 40% to $ 245.47 m (H1 2015: $ 175.86 m)
-- Gross Profit increased by 40% to $ 52.64 m (H1 2015: $ 37.66 m)
-- Operating Profit remains constant at $ 28.68 m (H1 2015: $ 28.62 m)
-- Loss before tax* moved to a loss of $ 146.49 m (H1 2015: loss of $ 69.03 m)
-- Investments in Property Plant and Equipment** decreased 4% to
$ 3,313 m (March 2015: $ 3,457 m)
*This includes an unrealised exchange loss of $ 27.93 million
due to restatement of the foreign currency component of certain
bank financing facilities and trade payables.
** Underlying increase of 1 % on a constant currency basis, but
headline decrease on account of translation difference from base
currency of INR 66.2958 per $ at closing as against INR 62.6788 per
$ at March 2015.
While underlying revenue and gross profit have both grown
compared to the same period last year, operating profit has
remained constant and loss before tax has increased, due to higher
finance costs. During the period, the pending PPA finalisation at
Sai Wardha, coupled with continuing transmission corridor
constraints of the national grid at KSK Mahanadi restricted actual
generation, resulting in lower than expected PLF at Sai Wardha and
KSK Mahanadi, causing mismatches in meeting overall financing
costs.
However, we are pleased to report that, starting early October
2015, the two 600 MW units at KSK Mahanadi became fully
operational. Compared to the gross generation of 2,134 GWh during
the first half, generation rose to 1,156 GWh during the first 45
days of the second half, and improvements both in revenue and gross
profit are expected in the second half of the current financial
year, with full benefits on a full year basis during FY2017.
Comparison of results
30 Sep 30 Sep % change 30 Sep 30 Sep % change
2015 2014 2015* 2014
(USD (USD (USD (USD
m) m) m) m)
Revenue 245.47 175.86 40% 261.95 175.86 49%
Gross profit 52.64 37.66 40% 56.17 37.66 49%
Operating profit 28.68 28.62 - 30.60 28.62 7%
(Loss) / profit
before tax (146.49) (69.03) 112% (156.33) (69.03) 126%
Average exchange Rs 64.250 Rs 60.207
rate Rs/USD
*September 2015 translated at September 2014 Rs/USD
exchange
Operating Highlights
-- Operating assets generated 4,026 GWh in the first half,
compared to 2,950 GWh for the similar period in the previous year,
an increase of 36%, with the following plant load factors
("PLF"):
30 Sep 2015 30 Sep 2014
KSK Mahanadi (1200 2,134
MW)* GWh (40%) 1,444 GWh (55%)
Sai Wardha (540
MW) 986 GWh (42%) 547 GWh (23%)
VS Lignite (135
MW) 418 GWh (70%) 473 GWh (80%)
Sai Regency (58
MW) 228 GWh (91%) 217 GWh (85%)
Sai Lilagar (86
MW) 93 GWh (25%) 95 GWh (25%)
Sitapuram Power
(43 MW) 159 GWh (84%) 166 GWh (88%)
Solar Project
(10 MW) 8 GWh (19%) 8 GWh (18%)
* Previous year calculated on 600 MW basis
-- With the recent commissioning of the first two 600 MW units
at the 3.6 GW KSK Mahanadi power project, phased construction in
line with available incremental capital expenditure is underway to
commission the next two 600 MW units during the second half of FY
2017 with the remaining 1,200 MWs scheduled to be completed during
the second half of FY 2018.
-- High coal costs continue to constrain operations at Sai
Wardha in addition to PPA issues on the IPP phase of the output.
Regarding coal cost reduction, following a decision made by the
Competition Commission of India; Western Coal Fields approached the
Competition Appellate Tribunal and ruling on the appeal is awaited
shortly and therefore it is anticipated that the issue could be
resolved in the second half of the year.
-- Favourable additional offtake agreements have been received
on the captive phase with two PPAs from Lupin Limited and Hindustan
Petroleum Corporation Limited totalling 33 MW. A Letter of Intent
for 10 MW was also received from RCF Limited. In addition to the
long term PPA with MSEDCL (a local state utility company), interim
short term power sale arrangements are being explored to improve
asset utilisation levels, enabling revenues and profitability to
continue to experience marginal improvements in the short term,
ahead of the full improvements being realised.
-- Notwithstanding the challenges across the sector and exchange
rate volatility that distorts the Company's performance, the
combination of our underlying assets, our risk mitigation
strategies and certain recent positive developments should, in the
long term, assist in moving the Company back towards meeting market
expectations. However, in the short term, owing to capacity
utilisation rates remaining below the Board's initial plans, these
changes will be gradual.
Commenting on the results, T. L. Sankar, Chairman of KSK
said:
"The first half of the current year witnessed the Company's
power plants' aggregate gross generation increasing to 4.02 TWhs,
helped by the commencement of supplies from the second 600 MW unit
at KSK Mahanadi. With the challenges at Sai Wardha and KSK Mahanadi
being addressed, it is anticipated that gross generation could
achieve 9 TWhs during 2015-16.
With regards to fuel supplies, it is understood the Ministry of
Power and Ministry of Coal are currently considering a
comprehensive new plan and structure wherein the coal linkages
could be formulated to address needs of those power plants that
have long term PPA commitments to state owned DISCOMS in place, and
have made physical progress on the ground. We believe that KSK
Mahanadi, with multiple DISCOMS supply PPAs in place, is well
positioned to address our coal requirements.
The Company continues to be in discussions with the project
stakeholders regarding the terms of existing drawn and undrawn
financial facilities and additional financing plans to enable KSK
Mahanadi to continue with the project execution. Discussions with
all stakeholders regarding such arrangements have been positive to
date and the Company's lenders are supportive of the proposed
arrangements, subject to them obtaining necessary consents.
KSK's performance during the period would not have been possible
without the valuable and appreciated support of its shareholders
who have enabled us to pursue appropriate business opportunities in
these challenging times."
For further information, please contact:
KSK Power Ventur plc
Mr. S. Kishore, Executive Director +91 (0)402 355 9922
Arden Partners plc
James Felix / Patrick Caulfield +44 (0)207 614 5900
Key Business Updates
-- 3,600 MW KSK MAHANADI POWER PROJECT:
The construction activity at KSK Mahanadi (a large, single
location, greenfield private power plant) continues, with
significant achievements during the period under review and post
period. To date, progress has been as follows:
o the first two units of 600 MW each are in operation;
o completion of the construction of the major part of the civil
works and common operation infrastructure at the site;
o water pipeline infrastructure to meet the water requirements
of the entire power plants is operational;
o rail connectivity to the power plant for coal transportation has been put in place; and
o switch yard and transformer yard commissioned, with the back
charging of 400kV switchyard and transmission system, enabling
connectivity for evacuation of power generated into the national
grid.
Following stabilised generation from the current 1,200 MW, the
Company's management is focusing its efforts on expediting the
construction of the next 1,200 MW, while the last 1,200 MW unit is
also planned to be taken up for completion. Further, it has been
proposed by the project lenders that the ancillary infrastructure
of KSK Water and Raigarh Champa Rail is to be merged into KSK
Mahanadi with the assets and associated debt facilities taken over
by KSK Mahanadi.
-- 540 MW SAI WARDHA POWER LIMITED (SWPL):
The total gross power generated during the review period was 986
GWh with an average PLF of 42%. This reflects the initial positive
movement achieved against the challenging local operating
environment and the fuel and open access grid constraints
experienced by Sai Wardha Power.
The Company continues to use every effort to pursue the coal
price reduction and the PPA achievement of the IPP phase, which
will ultimately lead to the enhanced utilisation and profitability
of the Sai Wardha plant.
-- 135 MW VS LIGNITE POWER PRIVATE LIMITED (VSLP):
The total gross power generated during the period was 418 GWh,
with an average PLF of 70 %. The Company has been mandated by the
local state for power supplies under a long term PPA with a local
grid company and is currently operating under a short term PPA
until March 2016. Efforts are continuing to secure necessary long
term PPAs from the local grid as mandated by the Government which
should be achieved during the current year.
-- 86 MW SAI LILAGAR POWER LIMITED (SLPL):
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