Indian energy generator OPG Power Ventures (OPG) made great leaps towards hitting its target operating capacity of 750 megawatts (MW) during the first half of its financial year. Operating capacity increased 122 per cent to 600MW, as the group's first Gujarat unit and Chennai plant commenced generation. This helped to boost cash profits by 40 per cent to £23.3m.
The coal-fired Chennai plant signed three-year sales agreements with several industrial customers to supply electricity directly. Management says this will not only improve the group's revenue visibility, but also its cash flow. OPG's chief executive, Arvind Gupta, says this is because payments from state utilities can take up to six months to come through, while industrial customers can take as little as 15 days.
OPG signed two memoranda of understanding (MOU) to invest in renewable energy generation. The first was with IBC Germany to set up 1,000MW of solar power projects over the next seven years, and the other was to establish 500MW of renewable power with the Tamil Nadu state government. This follows a decision from the Supreme Court of India, which has made it mandatory for large energy consumers to purchase a portion of their energy from renewable sources.
Broker Shore Capital expects adjusted EPS of 6.6p for the March 2016 year-end, up from 4.9p in 2015.
OPG POWER VENTURES (OPG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 87p | MARKET VALUE: | £305m | |
| TOUCH: | 86.5-87p | 12-MONTH HIGH: | 108p | LOW: 79p |
| DIVIDEND YIELD: | NIL | PE RATIO: | 14 | |
| NET ASSET VALUE: | 47p | NET DEBT: | 148% | |
| Half-year to 30 Sept | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 46.5 | 10.3 | 2.2 | nil |
| 2015 | 56.6 | 15.0 | 3.4 | nil |
| % change | +22 | +46 | +53 | - |
Ex-div: na Payment: na | ||||
