Essar Power FY13 Revenue Increased 72%
OREANDA-NEWS. Essar Power, part of UK-listed Essar Energy plc and a first mover among the private-sector players in the Indian power industry, today reported its financial results for the year ending March 31, 2013. On a consolidated basis, net sales rose 72% to Rs. 2,371 crore from Rs. 1,378 crore in FY12. In spite of lower plant load factor (PLF) of gas based units, total power generated by the company during the 12-month period rose 85% to 9,061 MUs on the back of 152% rise in capacity, which touched 3,826 MW as on March 31, 2013. Profit after tax, however was at negative Rs. 512 crore, against a profit of Rs. 335 crore in FY12. This was mainly on account of the losses sustained by the Salaya power plant, higher depreciation and more than doubling of interest cost at Rs. 931 crore due to projects commissioned during the year.
Talking on the results, Mr KVB Reddy, Executive Director, Essar Power, said, “We closed FY13 with more than doubling our generation capacity and achieved a number of project and operational milestones during the year. We commissioned both units of Salaya, synchronised unit I of Mahan, received final forest clearance for Aries Mine development, received stage II forest clearance for Mahan, and also signed a few long term PPAs at attractive prices. However slow pace of regulatory clearances for some captive mines and adverse impact of the Indonesian law on imported coal based projects such as Salaya is a concern. For the year ahead, we are focussed on commissioning our under construction project, securing relief for imported coal-based project, obtaining tapering coal linkage for Mahan Power Plant and pursuing mine clearance at Mahan, Chakla, and Aries.”
Mr Rajeev Aggarwal, CFO, Essar Power said, “During FY13, our revenues were significantly improved with the commissioning of Salaya and Vadinar power projects. However PAT has been impacted by higher imported coal costs. Our current focus is to get relief from GUVNL on account of increased coal losses and extending the debt tenure through bond placement. We have already raised Rs. 1,440 crore so far in the current financial year.”
Raw material security progress
Essar Power continues to make good progress towards stage 2 forest clearance for Mahan coal block, which is the captive mine for Mahan I power station. The company has also applied for an allocation of coal under Coal India's tapering coal linkage system in order to provide Mahan I with sufficient coal to cover the period until our own mining activities are fully operational. We continue to pursue this application. Currently, the plant is being operated using coal from the e-auction market in India.
We expect Aries, Salaya's captive coal block in Indonesia and fully-owned by Essar, to begin production by April 2014. Aries has estimated mineable reserves of 64 mmt with an annual potential production of 4 mmt.
On Tori, the Expert Appraisal Committee at the Ministry of Environment and Forests has recommended that environmental clearance be granted for Tori I unit 2 and for Tori II, and we expect the final notification soon. Coal for these projects will be supplied from the nearby captive coal blocks at Chakla and Ashok Karkata. We are currently progressing forest clearance and environmental consents required from the Indian government in order that mining operations can begin at the two coal blocks.