Azure Power Global Limited (NYSE: AZRE), a leading independent
solar power producer in India, today announced its consolidated
results under United States Generally Accepted Accounting
Principles (“GAAP”) for the first quarter ended June 30, 2018.
First Quarter 2019 Period Ended June 30, 2018 Operating
Highlights:
- Operating Megawatts were 1,011 MW, as
of June 30, 2018, an increase of 31% over June 30, 2017.
- Operating & Committed Megawatts
were 2,141 MW, as of June 30, 2018, an increase of 100% over June
30, 2017.
- Revenue for the quarter was INR 2,422.5
million (US$35.4 million), an increase of 29% over the quarter
ended June 30, 2017.
- Adjusted EBITDA for the quarter was INR
1,955.7 million (US$28.6 million), an increase of 33% over the
quarter ended June 30, 2017.
Key Operating Metrics
Electricity generation during the three months ended June 30,
2018 increased by 111 million kWh, or 38%, to 400.8 million kWh,
compared to the same period in 2017. The increase in electricity
generation was principally a result of additional capacity
operating during the period.
Total revenue during the three months ended June 30, 2018 was
INR 2,422.5 million (US$35.4 million), up 29% from INR 1,877.9
million during the same period in 2017. The increase in revenue was
primarily driven by the commissioning of new projects.
Project cost per megawatt operating (megawatt capacity per the
power purchase agreement) consists of costs incurred for one
megawatt of new solar power plant capacity during the reporting
period. The project cost per megawatt operating for the three
months ended June 30, 2018 decreased by INR 5.38 million (US$0.08
million) to INR 44.3 million (US$0.65 million) primarily due to
lower costs on account of the reduction in solar module prices for
the projects commissioned during the period.
As of June 30, 2018, our operating and committed megawatts
increased by 1,072 MW to 2,141 MW compared to June 30, 2017 as a
result of winning new projects.
Nominal Contracted Payments
The Company’s PPAs create long-term recurring customer payments.
Nominal contracted payments equal the sum of the estimated payments
that the customer is likely to make, subject to discounts or
rebates, over the remaining term of the PPAs. When calculating
nominal contracted payments, the Company includes those PPAs for
projects that are operating or committed.
The following table sets forth, with respect to our PPAs, the
aggregate nominal contracted payments and total estimated energy
output as of the reporting dates. These nominal contracted payments
have not been discounted to arrive at the present value.
As of June 30, 2017 2018
INR INR US$ Nominal contracted payments
(in thousands) 253,438,388 399,905,032 5,841,441 Total estimated
energy output (kilowatt hours in millions) 44,358 97,192
Nominal contracted payments increased from June 30, 2017 to June
30, 2018 as a result of the Company entering into additional
PPAs.
Portfolio Revenue Run-Rate
Portfolio revenue run-rate equals annualized payments from
customers extrapolated based on the operating and committed
capacity as of the reporting dates. In estimating the portfolio
revenue run-rate, the Company multiplies the PPA contract price per
kilowatt hour by the estimated annual energy output for all
operating and committed solar projects as of the reporting date.
The estimated annual energy output of the Company’s solar projects
is calculated using power generation simulation software and
validated by independent engineering firms. The main assumption
used in the calculation is the project location, which enables the
software to derive the estimated annual energy output from certain
meteorological data, including the temperature and solar insolation
based on the project location.
The following table sets forth, with respect to the Company’s
PPAs, the aggregate portfolio revenue run-rate and estimated annual
energy output as of the reporting dates. The portfolio revenue
run-rate has not been discounted to arrive at the present
value.
As of June 30, 2017 2018
INR INR US$ Portfolio revenue
run-rate (in thousands) 11,005,761 17,538,553 256,187 Estimated
annual energy output (kilowatt hours in millions) 1,921 4,200
Portfolio revenue run-rate increased by INR 6,532.8 million
(US$95.4 million) to INR 17,538.6 million (US$256.2 million) as of
June 30, 2018, as compared to June 30, 2017, due to an increase in
operational and committed capacity.
First Quarter 2019 Period ended June 30, 2018 Consolidated
Financial Results:
Operating Revenue
Operating revenue in the quarter ended June 30, 2018 was INR
2,422.5 million (US$35.4 million), an increase of 29% from INR
1,877.9 million over the same period in 2017. The increase in
revenue was driven by the commissioning of new projects.
In May 2014, the FASB issued revised accounting guidance for
revenue recognition from contracts with customers. The Company
adopted this revised accounting guidance for interim and annual
reporting periods beginning April 1, 2018 using the modified
retrospective method. Upon adoption of the standard the Company
recorded a cumulative-effect of a change in accounting principle as
of April 1, 2018 to reduce its accumulated deficit by INR 218.4
million (US$3.2 million), related to changes in the timing of
revenue recognition for certain contracts with its customers.
Cost of Operations
Cost of operations in the quarter ended June 30, 2018 increased
by 26% to INR 218.2 million (US$3.2 million) from INR 173.5 million
in the same period in 2017. The increase was primarily due to plant
maintenance cost for newly commissioned projects.
General and Administrative Expenses
General and administrative expenses for the quarter ended June
30, 2018 increased by INR 13.6 million (US$0.02 million), to INR
248.7 million (US$3.6 million) compared to the same period in 2017.
The general and administrative expenses did not increase
significantly due to scale of operations during the three months
ended June 30, 2018, as compared to previous comparable quarter in
2017.
Depreciation and Amortization Expenses
Depreciation and amortization expenses during the quarter ended
June 30, 2018 increased by INR 133.9 million (US$2.0 million), or
32%, to INR 553.6 million (US$8.1 million) compared to the same
period in 2017. The principal reason for the increase was
capitalization of new projects during the period from June 30, 2017
to June 30, 2018.
Interest Expense, Net
Net interest expense during the quarter ended June 30, 2018
increased by INR 233.8 million (US$3.4 million), or 28%, to INR
1,073.4 million (US$15.7 million) compared to the same period in
2017. Interest expense increased on account of borrowings for new
projects and was partially offset by the increased interest income
on investments during the quarter ended June 30, 2018.
Gain / Loss on Foreign Currency Exchange
The Indian rupee depreciated against the U.S. dollar by INR 3.6
to US$ 1.00 (5.5%) during the period from March 31, 2018 to June
30, 2018. This depreciation during the period from March 31, 2018
to June 30, 2018 resulted in a foreign exchange loss of INR 204.2
million (US$3.0 million), compared to a marginal gain of INR 4.8
million during the same period in 2017.
Income Tax Expense / Benefit
The income tax expense increased during the quarter ended June
30, 2018 by INR 86.7 million (US$1.3 million) to INR 94.6 million
(US$1.4 million), compared to income tax expense of INR 7.9 million
in the same period in 2017.
Net Income/ Loss
The net income for the quarter ended June 30, 2018 was INR 29.8
million (US$0.4 million), as compared to a net income of INR 206.9
million for the quarter ended June 30, 2017, a decrease in net
income by INR 177.1 million (US$2.6 million) as compared to the
same period in 2017. This was primarily due to foreign exchange
loss related to the depreciation of the Indian Rupee compared to
the U.S. Dollar during the quarter ended June 30, 2018.
Cash Flow and Working Capital
Cash used in operating activities for the fiscal quarter ended
June 30, 2018 was INR 749.6 million (US$11.0 million), INR 1,171.0
million (US$17.1 million) lower than the prior comparable period,
primarily due to the repayment of INR 1,412.0 million (US$20.6
million) of interest accrued since August 2017 on the Solar Green
Bonds during the current period.
Cash used in investing activities, for the fiscal quarter ended
June 30, 2018 was INR 4,196.0 million (US$61.3 million), compared
to INR 3,316.9 million for the prior comparable period, primarily
on account of purchases of property plant and equipment for new
projects amounting to INR 2,500.0 million (US$36.5 million) and an
increase in cash available for future projects invested in short
term investments for INR 1,705.6 million (US$24.9 million).
Cash generated from financing activities was INR 4,251.7
(US$62.1 million) for the fiscal quarter ended June 30, 2018,
compared to INR 2,460.3 million for the prior comparable
period.
Liquidity Position
As of June 30, 2018, the Company had INR 10,831.3 million
(US$158.2 million) of cash, cash equivalents and current
investments. The Company had undrawn project debt commitments of
INR 12,629.9 million (US$184.5 million) as of June 30, 2018.
Adjusted EBITDA
Adjusted EBITDA was INR 1,955.7 million (US$28.6 million) for
the fiscal first quarter period ended 2019, compared to INR 1,469.3
million in the first quarter ended June 30, 2017. The increase was
primarily due to the increase in revenue and economies of scale
achieved during the period.
Guidance for Fiscal Year 2019
The following statements are based on current expectations.
These statements are forward-looking and actual results may differ
materially. The Company continues to expect to have 1,300 – 1,400
MWs operational by March 31, 2019 and revenue between US$143 – 151
million for fiscal year ending March 31, 2019.
Webcast and Conference Call Information
The Company will hold its quarterly conference call to discuss
earnings results on Thursday, August 9, 2018 at 8:30 a.m. US
Eastern Time. The conference call can be accessed live by dialling
1-888-317-6003 (in the U.S.) and 1-412-317-6061 (outside the U.S.)
and entering the passcode
6706725. Investors may access a live webcast of this conference
call by visiting
http://investors.azurepower.com/events-and-presentations. For those
unable to listen to the live broadcast, a replay will be available
approximately two hours after the conclusion of the call. The
replay will remain available until Wednesday, August 15, 2018 and
can be accessed by dialling 1-877-344-7529 (in the U.S.) and
1-412-317-0088 (outside the U.S.) and entering the replay passcode
10122828. An archived podcast will be available at
http://investors.azurepower.com/events-and-presentations following
the call.
Exchange Rate
This press release contains translations of certain Indian rupee
amounts into U.S. dollars at specified rates solely for the
convenience of the reader. Unless otherwise stated, the translation
of Indian rupees into U.S. dollars has been made at INR 68.46 to
US$1.00, which is the noon buying rate in New York City for cable
transfer in non-U.S. currencies as certified for customs purposes
by the Federal Reserve Bank of New York on June 29, 2018. The
Company makes no representation that the Indian rupee or U.S.
dollar amounts referred to in this press release could have been
converted into U.S. dollars or Indian rupees, as the case may be,
at any particular rate or at all.
About Azure Power Global Limited
Azure Power is a leading independent solar power producer in
India. Azure Power developed India’s first private utility scale
solar project in 2009 and has been at the forefront in the sector
as a developer, constructor and operator of utility scale,
micro-grid and rooftop solar projects since its inception in 2008.
With its inhouse engineering, procurement and construction
expertise and advanced in-house operations and maintenance
capability, Azure Power manages the entire development and
operation process, providing low-cost solar power solutions to
customers throughout India.
Forward Looking Statements
This press release contains forward-looking statements within
the meaning of Section 21E of the Securities Exchange Act of 1934,
as amended and the Private Securities Litigation Reform Act of
1995, including statements regarding the Company’s future financial
and operating guidance, operational and financial results such as
estimates of nominal contracted payments remaining and portfolio
run rate, and the assumptions related to the calculation of the
foregoing metrics. The risks and uncertainties that could cause the
Company’s results to differ materially from those expressed or
implied by such forward-looking statements include: the
availability of additional financing on acceptable terms; changes
in the commercial and retail prices of traditional utility
generated electricity; changes in tariffs at which long term PPAs
are entered into; changes in policies and regulations including net
metering and interconnection limits or caps; the availability of
rebates, tax credits and other incentives; the availability of
solar panels and other raw materials; its limited operating
history, particularly as a new public company; its ability to
attract and retain its relationships with third parties, including
its solar partners; our ability to meet the covenants in its debt
facilities; meteorological conditions and such other risks
identified in the registration statements and reports that the
Company has filed with the U.S. Securities and Exchange Commission,
or SEC, from time to time. Portfolio represents the aggregate
megawatts capacity of solar power plants pursuant to PPAs, signed
or allotted or where the Company has been cleared as one of the
winning bidders or won a reverse auction but has yet to receive a
letter of allotment. All forward-looking statements in this press
release are based on information available to us as of the date
hereof, and the Company assumes no obligation to update these
forward-looking statements.
Use of Non-GAAP Financial Measures
Adjusted EBITDA
Adjusted EBITDA is a non-GAAP financial measure. We present
Adjusted EBITDA as a supplemental measure of our performance. This
measurement is not recognized in accordance with U.S. GAAP and
should not be viewed as an alternative to U.S. GAAP measures of
performance. The presentation of Adjusted EBITDA should not be
construed as an inference that our future results will be
unaffected by unusual or non-recurring items.
We define Adjusted EBITDA as net loss (income) plus (a) income
tax expense, (b) interest expense, net, (c) depreciation and
amortization and
(d) loss (income) on foreign currency exchange. We believe
Adjusted EBITDA is useful to investors in assessing our ongoing
financial performance and provides improved comparability between
periods through the exclusion of certain items that management
believes are not indicative of our operational profitability and
that may obscure underlying business results and trends. However,
this measure should not be considered in isolation or viewed as a
substitute for net income or other measures of performance
determined in accordance with U.S. GAAP. Moreover, Adjusted EBITDA
as used herein is not necessarily comparable to other similarly
titled measures of other companies due to potential inconsistencies
in the methods of calculation.
Our management believes this measure is useful to compare
general operating performance from period to period and to make
certain related management decisions. Adjusted EBITDA is also used
by securities analysts, lenders and others in their evaluation of
different companies because it excludes certain items that can vary
widely across different industries or among companies within the
same industry. For example, interest expense can be highly
dependent on a company’s capital structure, debt levels and credit
ratings. Therefore, the impact of interest expense on earnings can
vary significantly among companies. In addition, the tax positions
of companies can vary because of their differing abilities to take
advantage of tax benefits and because of the tax policies of the
various jurisdictions in which they operate. As a result, effective
tax rates and tax expense can vary considerably among
companies.
Adjusted EBITDA has limitations as an analytical tool, and you
should not consider it in isolation or as a substitute for analysis
of our results as reported under U.S. GAAP. Some of these
limitations include:
- it does not reflect our cash
expenditures or future requirements for capital expenditures or
contractual commitments or foreign exchange gain/loss;
- it does not reflect changes in, or cash
requirements for, working capital;
- it does not reflect significant
interest expense or the cash requirements necessary to service
interest or principal payments on our outstanding debt;
- it does not reflect payments made or
future requirements for income taxes; and
- although depreciation and amortization
are non-cash charges, the assets being depreciated and amortized
will often have to be replaced or paid in the future and Adjusted
EBITDA does not reflect cash requirements for such replacements or
payments.
Investors are encouraged to evaluate each adjustment and the
reasons the Company considers it appropriate for supplemental
analysis. For more information, please see the table captioned
“Reconciliations of Non-GAAP Measures to the Nearest Comparable
GAAP Measures” at the end of this release.
AZURE POWER GLOBAL LIMITED CONDENSED CONSOLIDATED BALANCE
SHEETS As of As of March 31,
June 30, 2018 2018 2018
(INR) (INR) (US$) (Unaudited) (in
thousands, except per share data) Assets Current
assets: Cash and cash equivalents 8,346,526 7,707,137 112,579
Investments in available for sale securities 1,383,573 3,124,125
45,634 Restricted cash 2,406,569 2,491,890 36,399 Accounts
receivable, net 2,223,455 2,865,920 41,863 Prepaid expenses and
other current assets 1,114,482 1,134,384 16,570
Total current
assets 15,474,605 17,323,456 253,045
Restricted cash 329,926 235,318 3,437 Property, plant and
equipment, net 56,580,700 58,643,437 856,609 Software, net 39,802
41,960 613 Deferred income taxes 1,052,393 1,003,922 14,664
Investments in held-to-maturity securities 7,041 7,419 108 Other
assets 499,653 3,274,026 47,824
Total assets
73,984,120 80,529,538 1,176,300 Liabilities
and shareholders’ equity Current liabilities: Short-term debt
835,000 835,000 12,197 Accounts payable 1,521,854 1,674,257 24,456
Current portion of long-term debt 873,883 953,516 13,928 Income
taxes payable 5,878 6,981 102 Interest payable 1,220,463 499,078
7,290 Deferred revenue 79,192 81,896 1,196 Other liabilities
611,598 496,757 7,256
Total current liabilities
5,147,868 4,547,485 66,425 Long-term debt
52,234,940 59,340,705 866,794 Deferred revenue 1,563,732 1,437,922
21,004 Deferred income taxes 892,138 1,202,995 17,572 Asset
retirement obligations 356,649 397,048 5,800 Other liabilities
513,344 198,362 2,895
Total liabilities 60,708,671
67,124,517 980,490 Shareholders’ equity Equity
shares (US$ 0.000625 par value; 25,996,932 and 25,996,932 shares
issued and outstanding as of March 31, 2018 and June 30, 2018)
1,076 1,076 17 Additional paid-in capital 19,004,604 19,024,251
277,889 Accumulated deficit (6,593,471) (6,367,034) (93,004)
Accumulated other comprehensive income (loss) (294,672) (432,964)
(6,324)
Total APGL shareholders’ equity 12,117,537
12,225,329 178,578 Non-controlling interest 1,157,912
1,179,692 17,232
Total shareholders’ equity
13,275,449 13,405,021 195,810 Total
liabilities and shareholders’ equity 73,984,120
80,529,538 1,176,300 AZURE POWER GLOBAL
LIMITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share data)
Unaudited three months ended June 30, 2017
2018 2018 INR INR US$*
Operating revenues: Sale of power 1,877,932 2,422,539 35,386
Operating costs and expenses: Cost of operations (exclusive
of depreciation and amortization shown separately below) 173,524
218,230 3,188 General and administrative 235,073 248,650 3,632
Depreciation and amortization 419,738 553,609 8,087 Total operating
costs and expenses 828,335 1,020,489 14,907
Operating income
1,049,597 1,402,050 20,479
Other expenses: Interest expense,
net 839,639 1,073,440 15,680 Loss/(gain) on foreign currency
exchange, net (4,758) 204,226 2,983 Total other expenses 834,881
1,277,666 18,663
Income before income tax 214,716 124,384
1,816 Income tax benefit/(expense) (7,859) (94,581) (1,382)
Net
income 206,857 29,803 434 Less: Net (loss)/income attributable
to non-controlling interests 36,746 21,780 318
Net income
attributable to APGL 170,111 8,023 116 Accretion to redeemable
non-controlling interest (10,988) — —
Net income attributable to
APGL equity shareholders 159,123 8,023 116 Net income per share
attributable to APGL shareholders: Basic 6.14 0.31 — Diluted 6.00
0.30 — Weighted average number of equity shares Basic 25,936,050
25,996,932 Diluted 26,502,283 26,910,175
* Translation of balances from INR to US$ in the consolidated
statement of operations is for the convenience of the reader and
was calculated using a rate of US$ 1.00 = INR 68.46.
AZURE POWER GLOBAL LIMITED CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (in thousands)
Unaudited three months ended June 30, 2017
2018 2018 INR INR
US$* Net cash (used)/ provided by operating activities
421,355 (749,647) (10,950) Net cash used in investing activities
(3,316,910) (4,195,954) (61,291) Net cash provided by financing
activities 2,460,289 4,251,738 62,105
* Translation of balances from INR to US$ in the condensed
consolidated statement of cash flow is for the convenience of the
reader and was calculated using a rate of US$ 1.00 = INR 68.46.
RECONCILIATIONS OF NON-GAAP MEASURES TO THE
NEAREST COMPARABLE GAAP MEASURES
(in thousands)
The table below sets forth a reconciliation of our income from
operations to Adjusted EBITDA for the periods indicated:
Unaudited three months ended June 30, 2017
2018 2018 INR INR
US$* Net income 206,857 29,803 434
Income tax (benefit)/expense 7,859 94,581 1,382 Interest expense,
net 839,639 1,073,440 15,680 Depreciation & amortization
419,738 553,609 8,087 Loss/(gain) on foreign currency exchange
(4,758) 204,226 2,983
Adjusted EBITDA 1,469,335 1,955,659
28,566
* Translation of balances from INR to US$ in the reconciliation
of Non-GAAP measure is for the convenience of the reader and was
calculated using a rate of US$ 1.00 = INR 68.46.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180808005656/en/
Investor Relation:For investor enquiries:Nathan Judge,
CFAir@azurepower.comorFor media related information:Samitla
Subbapr@azurepower.com.
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