Investors that have kept the faith in OPG Power (OPG) will soon be rewarded, with management planning a maiden dividend worth 15 per cent of net earnings in respect of the financial year ending March 2017. That’s because the Indian power generator has finally hit its target 750 megawatts (MW) of operating capacity, a 480MW uplift on the previous year.
Around 70 per cent of this capacity was operational last year, which management expects to increase to around 80 to 85 per cent by March next year. A reduction in Indian and Indonesian coal prices also helped boost profits - factory gate prices fell 1.6 per cent for Indian coal and 20.7 per cent for Indonesian coal. What's more, the generator's revenue stream has become more stable, after management signed a series of captive sales agreements with around 200 industrial customers to supply power from its Chennai plant. These contracts last between two and three years.
Management says its priority now is "squeezing the lemon", in terms of current capacity and projects. Part of this is building up its 62MW investment in four solar projects in one of India's most industrialised states, Karnataka. Management hopes to build 300MW of solar capacity within the next three years.
Analysts at Cantor Fitzgerald expect pre-tax profits of £35m in the 12 months to March 2017, giving EPS of 7.7p.
OPG POWER VENTURES (OPG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 57p | MARKET VALUE: | £200m | |
| TOUCH: | 56.5-57.5p | 12-MONTH HIGH: | 103p | LOW: 54p |
| DIVIDEND YIELD: | nil | PE RATIO: | 11 | |
| NET ASSET VALUE: | 51p | NET DEBT: | 141% | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 45.2 | 2.3 | 0.1 | nil |
| 2013 | 56.2 | 10.5 | 2.5 | nil |
| 2014 | 98.8 | 17.9 | 4.1 | nil |
| 2015 | 100 | 21.6 | 4.9 | nil |
| 2016 | 128 | 28.6 | 5.3 | nil |
| % change | +28 | +32 | +8 | - |
Ex-div: na Payment: na | ||||
