Greenko's half-year performance was hit by currency movements, a weak carbon credit market and a smaller contribution from the biomass operation. But the group is now fully funded to deliver its first 1GW of renewable power in India.
Moreover, since the period ended, General Electric has pumped $50m (£32m) into Greenko's wind subsidiary, while Standard Chartered accompanied these results with news of a $70m investment. For both GE and Standard Chartered, these represent first investments in renewable energy in India and Standard could also be a source of debt finance and refinancing for projects.
Greenko now has 183MW of operating assets and more than 400MW in development, with the funding now in place to boost this to 1GW by 2015. Crucially, the difficult power situation in India, where a significant deficit is compounded by high input costs for fossil fuel power generation, means that hydro and wind power have already reached grid parity. Still, Greenko's biomass and natural gas plants were hit by input cost rises and a slide in the Indian rupee. Management also withheld the sale of its carbon credits due to weak market pricing – although there was a strong performance in the hydro division.
Daniel Stewart expects full-year pre-tax profit of €8.6m, giving EPS of 3.6¢ (€10.1m and 4.4.¢ for 2011).
GREENKO (GKO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 137p | MARKET VALUE: | £194m | |
| TOUCH: | 135-139p | 12-MONTH HIGH: | 245p | LOW: 129p |
| DIVIDEND YIELD: | nil | PE RATIO: | 48 | |
| NET ASSET VALUE: | 135¢* | NET DEBT: | 19% | |
| Half-year to 30 Sep | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2010 | 25.8 | 9.14 | 5.20 | nil |
| 2011 | 19.8 | 3.09 | 1.15 | nil |
| % change | -23 | -66 | -78 | – |
*Includes intangible assets of €54.8m or 39¢ a share £1=€1.19 | ||||
