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 fiscal second quarter ended September
30, 2018.
Fiscal Second Quarter 2019 Period Ended September 30, 2018
Operating Highlights:
- Operating Megawatts (MW) were 1,018 MW
as of September 30, 2018, an increase of 27% over September 30,
2017.
- Operating & Committed Megawatts
were 3,059 MW as of September 30, 2018, an increase of 122% over
September 30, 2017.
- Revenue for the quarter was INR 2,225.7
million (US$ 30.7 million), an increase of 22% over the quarter
ended September 30, 2017.
- Adjusted EBITDA for the quarter was INR
1,807.7 million (US$ 24.9 million), an increase of 21% over the
quarter ended September 30, 2017.
Key Operating Metrics
Electricity generation during the six months ended September 30,
2018 increased by 192 million kWh, or 33%, to 773 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 six months ended September 30, 2018 was
INR 4,648.2 million (US$ 64.1 million), up 26% from INR 3,701.7
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 in DC)
consists of costs incurred for one megawatt of new solar power
plant during the reporting period. The project cost per megawatt
operating for the six months ended September 30, 2018 decreased by
INR 1.4 million (US$0.02 million) to INR 44.3 million (US$0.61
million) primarily due to lower costs on account of decline in
solar module prices. The project cost per megawatt operating (AC)
was INR 50.78 million (US$ 0.70 million).
As of September 30, 2018, our operating and committed megawatts
increased by 1,678 MW compared to September 30, 2017 to 3,059 MW 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 September 30, 2017
2018 INR INR US$
Nominal contracted payments (in
thousands)
296,524,749
544,314,570
7,503,647
Total estimated energy output (kilowatt hours in millions) 60,349
153,880
Nominal contracted payments increased from September 30, 2017 to
September 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 September 30, 2017 2018
INR INR US$ Portfolio revenue run-rate
(in thousands) 12,827,890 23,896,380 329,423 Estimated annual
energy output (kilowatt hours in millions) 2,541 6,676
Portfolio revenue run-rate increased by INR 11,068.5 million
(US$152.6 million) to INR 23,896.4 million (US$329.4 million) as of
September 30, 2018, as compared to September 30, 2017, due to an
increase in operational and committed capacity.
Fiscal Second Quarter 2019 Period ended September 30, 2018
Consolidated Financial Results:
Operating Revenues
Operating revenues during the three months ended September 30,
2018 increased by INR 401.9 million, or 22%, to INR 2,225.7 million
(US$ 30.7 million) compared to the same period in 2017. The
increase in revenue for the three months ended September 30, 2018
is on account of projects commissioned by the Company since last
year.
Cost of Operations (Exclusive of Depreciation and
Amortization)
Cost of operations during the three months ended September 30,
2018 increased by INR 31.4 million, or 22%, to INR 176.1 million
(US$ 2.4 million) compared to the same period in 2017. The increase
was primarily due to increase in plant maintenance cost related to
newly operational projects. The operating cost per megawatt during
the three months period ended September 30, 2018 was INR 0.17
million, a decrease of INR 0.01 million per megawatt as compared to
the same period in 2017.
General and Administrative Expenses
General and administrative expenses during the three months
ended September 30, 2018 increased by INR 62.3 million, or 35%, to
INR 241.9 million (US$ 3.3 million) compared to the same period in
2017. General and administrative expenses during the three month’s
period ended September 30, 2017, included a INR 43.2 million
(US$0.6 million) one-time credit from vendors; excluding the
one-time credit, the increase in general and administrative expense
in fiscal second quarter 2018 would have been 8.6 %.
Depreciation and Amortization
Depreciation and amortization expenses during the three months
ended September 30, 2018 increased by INR 134.5 million, or 29%, to
INR 597.5 million (US$ 8.2 million) compared to the same period in
2017. The principal reason for the increase in depreciation during
the three months ended September 30, 2018 was the commissioning of
several projects including the Uttar Pradesh 2 solar power project,
which was fully operational during the second quarter of fiscal
year 2018, as well as the commissioning of the Telangana 1 project,
which commenced operations in the fourth quarter of fiscal year
2018, and the Uttar Pradesh 3 and Andhra Pradesh 3 projects which
commenced operations in the first quarter of fiscal year 2019.
Interest Expense, Net
Net interest expense during the three months ended September 30,
2018 decreased by INR 1,107.9 million, or 47%, to INR 1,257.0
million (US$ 17.3 million) compared to the same period in 2017.
During the prior comparable period, the Company had one-time
non-cash write offs of unamortized deferred financing costs of INR
615.5 million related to the issuance of the solar Green Bond and
one-time prepayment fees of INR 658.4 million for debt refinancing
related to the use of proceeds from the solar Green Bond. Excluding
the one-time impact of the solar Green Bond, the net interest
expense would have increased by approximately 16%.
Loss on Foreign Currency Exchange
Foreign exchange loss during the three months ended September
30, 2018 increased by INR 193.8 million compared to the same period
in 2017 to INR 236.8 million (US$ 3.3 million). For the six months
ended September, 30 2018, the foreign exchange loss comprised
primarily of unrealized non-cash losses on foreign currency loans
of INR 431.5 million (US$ 6.0 million). During the current period,
the company has not realized any material cash foreign exchange
loss due to hedging.
The Indian rupee depreciated against the U.S. dollar by INR 4.0
to US$ 1.00 (5.8%) during the period from June 30, 2018 to
September 30, 2018, as compared to a depreciation of INR 0.6 to
US$1.0 (1.0%), during the same period in 2017. This depreciation
during the period from June 30, 2018 to September 30, 2018 resulted
in a foreign exchange loss of INR 236.8 million (US$ 3.3 million),
compared to a loss of INR 43.0 million during the same period in
2017.
Income Tax Expense / (Benefit)
Income tax expense increased by INR 144.9 million to INR 13.9
million (US$ 0.2 million) during the three months ended September
30, 2018 reflecting lower losses during the quarter.
Net Loss
The net loss for the quarter ended September 30, 2018 was INR
297.6 million (US$ 4.1 million) as compared to a net loss of INR
1,240.5 million for the quarter ended September 30, 2017, an
improvement of INR 943.0 million (US$ 13.0 million) as compared to
the same period in 2017. This was primarily due to increase in
revenue from newly commissioned projects.
Cash Flow and Working Capital
Cash generated from operating activities for the six months
ended September 30, 2018 was INR 1,014.4 million (US$ 14.0
million), INR 786.6 million (US$ 10.8 million) higher than the
prior comparable period, primarily due to higher revenues from new
projects commissioned since last year.
Cash used in investing activities for the six months ended
September 30, 2018 was INR 7,549.2 million (US$ 104.1 million)
compared to INR 7,292.9 million for the prior comparable period.
The cash used in investing activities was higher due to increase in
the procurement of Property, Plant and Equipment used in the
construction of solar power plants during the period.
Cash generated from financing activities was INR 8,457.3 (US$
116.6 million) for the six months ended September 30, 2018,
compared to INR 15,351.0 million for the prior comparable period,
as the Company issued a US$ 500 million solar Green Bond during the
quarter ended September 30, 2017.
Liquidity Position
As of September 30, 2018, the Company had INR 10,754.8 million
(US$ 148.3 million) of cash, cash equivalents and current
investments. The Company had undrawn project debt commitments of
INR 18,675.1 million (US$ 257.4 million) as of September 30, 2018
and a working capital facility of INR 3,020.0 million (US$ 41.7
million). Further, the Company issued 14,800,000 shares during
October 2018 raising $ 185.0 million through a public follow-on
offering.
Adjusted EBITDA
Adjusted EBITDA was INR 1,807.7 million (US$ 24.9 million) for
the fiscal second quarter period ended 2019, compared to INR
1,499.5 million in the second quarter ended September 30, 2017. The
increase was primarily due to the increase in revenue and economies
of scale on operating costs achieved during the period.
Earnings per share
The loss per share for the three months ended 30 September,
2018, was US$ 0.16, as compared to US$0.64 for the prior comparable
period. Excluding the impact of the loss on foreign currency
(non-cash), the loss per share for the three months ended 30
September 2018, would have been US$ 0.03.
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 Wednesday, November 14, 2018 at 8:30 a.m. US
Eastern Time. The conference call can be accessed live by dialing
1-888-317-6003 (in the U.S.) and 1-412-317-6061 (outside the U.S.)
and entering the passcode 6001764. 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, November 21, 2018
and can be accessed by dialing 1-877-344-7529 (in the U.S.) and
1-412-317-0088 (outside the U.S.) and entering the replay passcode
10125823. 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 72.54 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 September 28, 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, September 30,
2018 2018 2018 (INR)
(INR) (US$) (Unaudited) (in thousands)
Assets
Current assets:
Cash and
cash equivalents
8,346,526 7,552,537 104,115
Investments
in available for sale securities
1,383,573 3,202,288 44,145
Restricted
cash
2,406,569 4,110,496 56,665
Accounts
receivable, net
2,223,455 2,229,906 30,740
Prepaid
expenses and other current assets
1,114,482 1,448,509 19,968
Total current assets
15,474,605
18,543,736 255,633 Restricted cash 329,926 1,370,835
18,898 Property, plant and equipment, net 56,580,700 65,702,333
905,739 Software, net 39,802 43,675 602 Deferred income taxes
1,052,393 1,087,208 14,988 Investments in held-to-maturity
securities 7,041 7,844 108 Other assets 499,653 4,449,912 61,344
Total assets 73,984,120 91,205,543
1,257,312 Liabilities and shareholders’ equity
Current liabilities:
Short-term
debt
835,000 3,816,328 52,610
Accounts
payable
1,521,854 5,981,960 82,464
Current
portion of long-term debt
873,883 1,173,932 16,183
Income taxes
payable
5,878 7,365 102
Interest
payable
1,220,463 932,520 12,855
Deferred
revenue
79,192 81,857 1,128
Other
liabilities
611,598 807,076 11,126
Total
current liabilities
5,147,868 12,801,038 176,468 Long-term debt
52,234,940 63,046,596 869,129 Deferred revenue 1,563,732 1,425,879
19,656 Deferred income taxes 892,138 1,381,976 19,051 Asset
retirement obligations 356,649 404,861 5,581 Other liabilities
513,344 222,314 3,065
Total liabilities 60,708,671
79,282,664 1,092,950 Shareholders’ equity
Equity shares (US$ 0.000625 par value; 25,996,932 and 26,023,790
shares issued and outstanding as of
March 31, 2018 and
September 30, 2018)
1,076 1,077 15 Additional paid-in capital 19,004,604 19,046,042
262,559 Accumulated deficit (6,593,471) (6,662,634) (91,848)
Accumulated other comprehensive income (loss) (294,672) (1,640,830)
(22,620)
Total APGL shareholders’ equity 12,117,537
10,743,655 148,106 Non-controlling interest 1,157,912
1,179,224 16,256
Total shareholders’ equity
13,275,449 11,922,879 164,362 Total
liabilities and shareholders’ equity 73,984,120
91,205,543 1,257,312 AZURE POWER GLOBAL
LIMITED UNAUDITED INTERIM CONSOLIDATED INCOME STATEMENTS
Three months ended September 30,
Six months ended September 30, 2017
2018 2018 2017 2018
2018 INR INR US$ INR
INR US$
(in thousands, except per share data) Operating
revenues: Sale of power 1,823,797 2,225,693 30,682 3,701,729
4,648,232 64,078
Operating costs and expenses:
Cost of operations (exclusive of
depreciation and amortization shown
separately below)
144,689 176,060 2,427 318,213 394,290 5,435 General and
administrative 179,609 241,884 3,334 414,682 490,534 6,762
Depreciation and amortization 462,999 597,526 8,237 882,737
1,151,135 15,869
Total
operating cost and expenses
787,297 1,015,470 13,998 1,615,632 2,035,959 28,066
Operating
income 1,036,500 1,210,223 16,684 2,086,097 2,612,273 36,012
Other expense: Interest expense, net 2,364,946 1,257,058
17,329 3,204,585 2,330,498 32,127 Loss on foreign currency
exchange, net 43,017 236,840 3,266 38,259 441,066 6,080
Total other
expenses
2,407,963 1,493,898 20,595 3,242,844 2,771,564 38,207
Loss
before income tax (1,371,463) (283,675) (3,911) (1,156,747)
(159,291) (2,195) Income tax benefit/(expense) 130,934
(13,930) (192) 123,075 (108,511) (1,496)
Net loss
(1,240,529) (297,605) (4,103) (1,033,672) (267,802) (3,691)
Net income / (loss) attributable to non-controlling interest
(170,901) (2,005) (28) (134,155) 19,775 273
Net loss
attributable to APGL (1,069,628) (295,600) (4,075) (899,517)
(287,577) (3,964) Accretion to redeemable non-controlling
interest (11,109) — —
(22,097) — —
Net loss attributable to APGL equity
shareholders (1,080,737) (295,600) (4,075) (921,614) (287,577)
(3,964) Net loss per share attributable to APGL equity stockholders
Basic and
diluted
(42) (11) (0.16) (36) (11) (0.15) Shares used in computing basic
and diluted per share amounts Equity shares 25,983,264 26,022,102
25,959,786 26,009,517
AZURE POWER GLOBAL LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended September 30,
Six months ended September 30, 2017
2018 2018 2017 2018
2018 INR INR US$ INR
INR US$ (in thousands) Net cash provided
by/(used in) operating activities (193,533) 1,764,039 24,318
227,822 1,014,392 13,984 Net cash used in investing
activities (3,259,533) (3,353,268) (46,226) (7,292,929) (7,549,222)
(104,070) Net cash provided by financing activities 12,890,666
4,205,523 57,975 15,350,955 8,457,261 116,588
RECONCILIATIONS OF NON-GAAP MEASURES TO THE
NEAREST COMPARABLE GAAP MEASURES
The table below sets forth a reconciliation of our income from
operations to Adjusted EBITDA for the periods indicated:
Three months ended September 30,
Six months ended September 30, 2017
2018 2018 2017
2018 2018 INR INR US$
INR INR US$ (in thousands) Net
Loss (1,240,529) (297,605) (4,103) (1,033,672) (267,802)
(3,691) Income tax expense/(benefit) (130,934) 13,930 192 (123,075)
108,511 1,496 Interest expense, net 2,364,946 1,257,058 17,329
3,204,585 2,330,498 32,127 Depreciation and amortization 462,999
597,526 8,237 882,737 1,151,135 15,869 Loss on foreign currency
exchange, net 43,017 236,840 3,266 38,259 441,066 6,080
Adjusted EBITDA 1,499,499 1,807,749 24,921 2,968,834
3,763,408 51,881
View source
version on businesswire.com: https://www.businesswire.com/news/home/20181113006132/en/
Azure Power Global LtdInvestor ContactNathan Judge,
CFAInvestor Relationsir@azurepower.comorMedia ContactSamitla
SubbaMarketingpr@azurepower.com+91-11- 4940 9854
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