For OPG Power Ventures (OPG), the first full-year contribution from its plant in India’s Gujarat state had contrasting effects on full-year figures. On the one hand, the total volume of electricity generated increased by 30 per cent, leading to a surge in revenue. However, debt on the plant, commissioned in January 2016, meant an increase in net finance cost of £21.3m, leading to a big drop in statutory profit before tax.
As previously warned, a “sustained and unexpectedly high” seaborne thermal coal price has weighed heavily on the company and is expected to affect its 2018 performance. It is exploring options for reducing the risk associated with changes in the price, and in mid-2018 the delivery of two new carrier vessels will provide some mitigation as part of the group’s joint venture with Noble Chartering. Input costs obviously remain an issue, but the 5.4 per cent compound annual growth rate for India’s electricity markets, combined with GDP growth in excess of 7 per cent, bodes well for growth in the future.
Analysts at Cenkos are forecasting a drop to an adjusted pre-tax loss of £2.2m in 2018, giving EPS of 1.3p, rising to a profit of £27.9m and earnings of 6.2p in 2019 (from £17.5m and 8.4p in 2017).
| OPG POWER VENTURES (OPG) | ||||
| ORD PRICE: | 25p | MARKET VALUE: | £87m | |
| TOUCH: | 24.7-25p | 12-MONTH HIGH: | 72p | LOW: 22p |
| DIVIDEND YIELD: | 4.0% | PE RATIO: | 3 | |
| NET ASSET VALUE: | 71p | NET DEBT: | 130% | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 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 |
| 2017 | 205 | 17.5 | 8.4 | 0.98 |
| % change | +60 | -39 | +58 | - |
| Ex-div: | tbc | |||
| Payment: | tbc |
