RESULTS: Indian power plant operator and developer OPG Power Ventures (OPG) will almost double its output in the second half, and, with power prices rising and coal costs set to fall, the shares have soared over 50 per cent from their June lows. But even bigger things are to come - finance director VN Swami expects total power output to more than triple from the current 190 megawatts (MW) to 750 MW in the next two years.
India is short of power and the government has recently allowed prices to rise to fund much needed investment. OPG enjoyed an 18 per cent rise in the average tariff from 4.80 to 5.67 rupees per kilowatt hour. But an 17 per cent fall in the value of the rupee against sterling meant first-half numbers were at best stable, with underlying pre-tax profits flat at £2.51m (the reported numbers are skewed by legacy assets that are no longer consolidated).
Second half numbers will be boosted by a new 77MW power plant, Chennai II, that became fully operational in October, and Mr Swami thinks further tariff increases are also possible. Revenue visibility is also good for the second half after the company signed a major supply contract with the state utility to provide power until May next year. A further 80 MW plant, Chennai III, is expected to be completed within six months.
OPG POWER VENTURES (OPG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 51p | MARKET VALUE: | £179m | |
| TOUCH: | 50-52p | 12-MONTH HIGH: | 57p | LOW: 29p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 37p | NET DEBT: | 47% | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 23.9 | 3.03 | 0.61 | nil |
| 2012 | 17.8 | 2.51 | 0.44 | nil |
| % change | -26 | -17 | -27 | - |
Ex-div: na Payment: na | ||||
