A growing economy means that demand for electricity in India will continue to accelerate. And that's good news for OPG Power Ventures (OPG), where a two-thirds increase in electricity generation in the six months to September saw revenue more than double, while cash profits jumped 81 per cent to £42.1m.
At the Chennai plant, output grew by 16 per cent over the previous six months, while the PLF ratio - that's actual output as a percentage of total possible out - reached 80 per cent. Output at the Gujarat plant was nearly doubled, having been fully commissioned in February, and the average PLF ratio was around 70 per cent compared with a national average for similar thermal plants of 62 per cent.
Higher coal prices in the first half were mitigated to some extent as a result of advanced purchase orders at the start of the year. Around two-thirds of second-half requirements have already been purchased, although this will entail additional costs of around £7m. Looking ahead, the group has secured, in principle, finance for its 62 megawatt solar projects, which should enable it to start onsite works in the second half.
Shareholders were also rewarded with a maiden half-year dividend, with the annual proposed payout of 15 per cent of net earnings split between one-third at the half-year stage and the balance comprising a final dividend.
Analysts at Macquarie expect adjusted profit of £30.8m for the 12 months to March 2017 and EPS of 9p a share (from £18.6m and 5p in FY2016).
| OPG POWER VENTURES (OPG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 68.5p | MARKET VALUE: | £241m | |
| TOUCH: | 68-69p | 12-MONTH HIGH: | 84p | LOW: 54p |
| DIVIDEND YIELD: | 0.4% | PE RATIO: | 10 | |
| NET ASSET VALUE: | 60p | NET DEBT: | 128% | |
| Half-yearto 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 57 | 15.0 | 3.4 | nil |
| 2016 | 118 | 17.9 | 4.8 | 0.26 |
| % change | +108 | +19 | +41 | - |
Ex-div: tba Payment: tba | ||||
