Trading Update (0698Y)
February 24 2012 - 5:37AM
UK Regulatory
TIDMOPG
RNS Number : 0698Y
OPG Power Ventures plc
24 February 2012
OPG Power Ventures plc
(the "Company")
Trading Update
The Company provides the following update since its interim
results, released on 14 December 2011.
77 MW Chennai I performing strongly
The Company's flagship 77 MW Chennai I plant has continued to
perform well, consistently achieving average load factors of over
90 per cent during the second half of the year.
The Company holds 99% ownership interest in this flagship
plant.
77 MW Chennai II - remains ahead of schedule, on-site trials to
commence shortly
The Company has made good progress on this 77 MW project, a
replica of Chennai I, with all critical equipment in place and
construction and erection activities at an advanced stage. On-site
equipment trials are expected to begin by March 2012 and
commissioning activities are expected to commence thereafterby Q2,
2012.
80 MW Chennai IV currently ahead of schedule
Major construction activities for Chennai IV including boiler
erection are underway and at this mid-construction stage, whilst
the expected commissioning date is not being changed, the project
as a whole is ahead of schedule.
160 MW Chennai III on track
Equipment procurement has now been initiated for Chennai III and
construction activities are expected to commence shortly on this
project. This plant remains on track for commissioning in 2013.
300 MW Gujarat project on track for 2013 commissioning
At the time of its interim results, OPG continued to outline
certain local objections received in connection with its Gujarat
project that were under resolution. According to the Company's
legal advisers, a significant order handed to the Company by the
National Green Tribunal ("NGT") on 14 February 2012, upholds the
validity of all environmental and other clearances previously
obtained on the project. Accordingly construction has continued and
the project remains on track for commissioning in 2013.
Proportional impact of 10 MW and 25 MW legacy plants expected to
decline
The previously reported underperformance of the Group's 10 MW
waste heat plant and 24.5MW gas fired plant has continued on
account of sustained poor availability of waste heat and natural
gas. The Company holds minority interests in both units (33% and
44% respectively) but consolidates the results of their operations
in full. Whilst the Company continues to review its long term
strategy for these units, their performance is expected to lead to
results for the current period being below management's
expectations with such performance levels expected to continue into
the subsequent financial year with the added effect of a 15%
increase in gas prices going forward. However, as additional
capacity is brought online, the proportional impact of these legacy
assets upon consolidated results and earnings is expected to
decline and to be almost negligible in the subsequent years.
Current period results are also likely to be affected by a
one-off provision for certain historic costs of GBP0.8m.
Fuel Supply Arrangements
Chennai II has long term fuel Supply agreement with Coal India
Limited ("CIL"). In addition the Company has entered into
arrangements with an overseas supplier to further ensure coal
security for all of its operations during calendar year 2012 at
competitive pricing levels.
The Tamil Nadu state regulator is expected to make its tariff
order by 25 March 2012
In connection with a petition filed by the state electricity
board ("SEB") with the state tariff regulator on 25 November 2011
and in accordance with the timelines set out under the Electricity
Act 2003, the Company expects the regulator to issue its order by
25 March 2012 and a further update will be provided once it is
available. In its petition the SEB is seeking a 25% increase in
industrial tariff, a fuel surcharge and the establishment of annual
reviews. Once the new tariff order is implemented, the Board
expects the Company's current trading environment will improve.
In relation to the update chief executive Arvind Gupta
commented: "2012 is an important year for the de-risking of our
project portfolio and good progress has already been made at both
major locations. In particular over 150 MW of new capacity at
Chennai, that is currently ahead of schedule, augments our existing
flagship 77 MW operating unit and gives us continued momentum
towards our target of 1,250MW by 2015. The macro outlook for power
generators is good. India continues to have a strong demand for
power well in excess of supply. The increase in industrial tariff
and the introduction of fuel surcharge will offer generators
protection from fuel price fluctuation. I look forward to reporting
on further project developments in the coming months."
About OPG
OPG isoperating and developing power projects in India under the
group captive model with 113 MW in operations and a further 742 MW
under development. In the six months ended 30 September 2011, from
its unaudited interim results, the group's revenues were GBP23.85 m
and profit before tax was GBP3.03m.
For further information, please visit www.opgpower.com or
contact:
+91 (0) 44 429
OPG Power Ventures plc 11 222
Arvind Gupta (Managing Director)
V. Narayan Swami (Finance Director)
Cenkos Securities (Nominated Adviser +44 (0) 20 7397
& Broker) 8900
Stephen Keys/ Camilla Hume
+44 (0) 20 7920
Tavistock Communications 3150
Simon Hudson / Sonya Williams
This information is provided by RNS
The company news service from the London Stock Exchange
END
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