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Turnaround performance for Essar Power Gujarat

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July 10, 2016 Bookmark and Share  

FY 16 Highlights

  • EBITDA in FY16 at Rs 533 crore—up by 168%, compared to Rs 199 crore in FY15
  • FY16 EBITDA margin is 28% compared to 11% in FY15
  • Revenue rises to Rs 1,905 crore in FY16 from Rs 1,867 crore
  • Investment grade rating of BBB- and repayment of the term loan aligned to the life of the power plant under 5/25 scheme of RBI
  • Reverse e-auction for coal procurement helped reduce sourcing cost, widen supplier base and increase competition

Q1 FY 17 Highlights

  • Q1 FY17 EBITDA is Rs 160 crore—a growth of 80% when compared to Q1 FY 16 EBITDA of Rs 89 crore
  • Q1 FY17 EBITDA margin is 31%, compared to 22% in Q1 FY16

Mumbai / Devbhumi Dwarka, 10 July 2016: Essar Power Gujarat Ltd (EPGL), which owns and operates a 1,200 MW imported coal-fired thermal power plant at Salaya in Gujarat’s Devbhumi Dwarka district, has recorded a 168% growth in EBITDA in the financial year ending 31 March 2016—three years after commissioning. The PAT is around Rs 39 crore, compared to a loss of Rs 684 crore in FY15. This turnaround in performance can be attributed to higher operational efficiency, a reduction in coal prices through e-auction based procurement, and normative plant availability.

Turnaround performance for Essar Power Gujarat

EPGL’s EBITDA in FY16 stood at Rs 533 crore, compared to Rs 199 crore in FY15. The FY16 EBITDA margin is 28% compared to 11% in FY15.

Turnaround performance for Essar Power Gujarat

A key factor driving financial performance, the reverse e-auction platform set up by EPGL helped widen the company’s coal supplier base. Coal miners / suppliers from the US, Russia, Colombia and other countries placed competitive bids in a transparent manner. Global competition helped EPGL source coal at prices lower than those prevailing in the market.

The 2015-16 financial year was also significant for the company for several other reasons. During this period EPGL completed a planned major overhaul of the Salaya plant without the support of the OEM—which is a first for any Indian power plant. It was also a time when the Company aligned the repayment of its term loan to RBI’s 5/25 scheme. The Company won the Peabody Award for lowest emission of SO2 and NOX; it also won Energy Efficiency award and the Gold Category Award for Safety from Greentech Foundation.

EPGL has an ongoing 25-year PPA with the country’s highest rated discom, the Gujarat Urja Vikas Nigam Limited (GUVNL; Rating A1+), for 90% of its capacity, ensuring timely payment of receivables. For the third consecutive year, EPGL ensured 80% annual availability and in Q1 FY 17 EPGL has already achieved GUVNL availability of over 80%.

According to Mr Ramesh Kumar, Managing Director, EPGL: “We have worked relentlessly despite the challenging business environment to deliver a significant improvement in our performance. We are on course to harness greater efficiencies in the current financial year once with the imminent commissioning of a sea water intake system and coal conveyor corridor. These are expected to add Rs 150 crore to the margins. With sustained performance in the first quarter of the current financial year and better operational efficiency, we are confident of further improving our earnings in the current fiscal.”

The EBITDA for the first quarter of FY17 EBITDA is Rs 160 crore. This is a growth of 80% when compared to the Q1 FY 16 EBITDA of Rs 89 crore. The Q1 FY17 EBITDA margin also saw a 9% growth–from 22% in Q1 FY15 to 31% in Q1FY16.

About Essar Power Ltd
Essar Power Ltd is one of India's largest private sector power producers with over 20 years’ operating track record. It owns power plants in India and Canada with a total generation capacity of 6,100 MW, of which 4,675 MW is operational. Of the total operational capacity, 3,075 MW is coal-based, while 1,600 MW is gas-based. The operating plants in India are at Mahan, Hazira, Salaya and Vadinar. A 1,200 MW plant at Tori in Jharkhand state is under development.

Media contact:

Manish Kedia, Senior Vice President - Corporate Affairs, Essar
Phone: +91 98197 30092, Email:  manish.kedia@essar.com

Ravi Muthreja, Vice President - Corporate Communication, Essar
Phone: + 91 99301 34566, Email : Ravi.Muthreja@essar.com

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