JSW Energy on Wednesday reported a 36% year-on-year increase in its consolidated net profit to Rs 297 crore for the July-September quarter, beating the Bloomberg analysts’ profit estimates of Rs 215 crore, mainly because of an increase in other incomes.
JSW Energy on Wednesday reported a 36% year-on-year increase in its consolidated net profit to Rs 297 crore for the July-September quarter, beating the Bloomberg analysts’ profit estimates of Rs 215 crore, mainly because of an increase in other incomes. Excluding other incomes, the profit plummeted by around Rs 40 crore compared to the same quarter last fiscal. The net profit was led by a 230% jump in other incomes and improved merchant sales realisations during the quarter, it said. The earnings before interest, tax, depreciation and amortisation (EBITDA), or the operating income, for the quarter was up by just 4% y-o-y to Rs 1,053 crore, including other income. Without other income, the EBITDA dropped by 8% to Rs 883 crore and EBITDA margins fell to 43% from 46% a year ago. The marginal increase in EBITDA is due to higher merchant realisations, other incomes and operational efficiencies at a time when the sector is reeling under demand pressure, the company said. Including other income, the operating margin stood at 51% for the quarter, compared with 49% a year ago. Total income from operations was up 6% to Rs 2,220 crore while other incomes for the period were up 230% to Rs 170.54 crore.
Prashant Jain, joint managing director and CEO of JSW Energy, said: “The profit for the quarter was supported by improved demand for power from states, better merchant rates and higher other income compared with the same period a year ago.” The merchant rates were higher at Rs 3.22 per unit during the July-September quarter, compared with Rs 2.24 in Q2FY17, because of higher demand from the states which have stopped purchasing high-cost power and honouring their PPAs at higher rates after the drop in renewable energy tariffs. The consolidated plant load factor for the reporting quarter was, however, lower at 72% as against 77% a year ago. Net generation also fell to 6.12 billion units from 6.27 billion units.
Finance costs during the quarter fell 10.25% to Rs 391 crore a year ago as the company reduced its interest rates through refinancing of debt and prepayment of borrowings. Jyoti Kumar Agarwal, chief financial officer, said, “We prepaid around Rs 1,705 crore during the quarter through internal accruals, which helped us bring down the borrowing cost to 9.33% from 10.17% a year ago. During the calendar year 2017, the company has refinanced around Rs 6,000 crore worth of debt.” As of September 30, 2017, JSW Energy’s consolidated net debt stood at Rs 12,679 crore after the prepayment of Rs 1,705 crore during the quarter.
The consolidated net worth of the company as of September-end was Rs 11,259 crore, which is higher compared with Rs 10,696 crore in the sequential quarter. The net debt to equity ratio is 1.13 times, compared with 1.28 in the April-June quarter. On the operational front, the company is planning to set up around 100 MW of off-grid rooftop solar power projects and has secured a Rs 600-crore line of credit from SBI and the World Bank for the purpose. The company is also on track for the electric vehicle business and has signed a memorandum of understanding with the Gujarat government to set up a manufacturing plant for electric vehicles and the storage battery plant. “We will update on the product and technology strategies in due course,” Jain said.