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Suzlon Energy aims to reduce 40pct debt by FY18

Power News - Published on Fri, 27 Jul 2018

Image Source: energyinfrapost.com
Business Standard reported that Suzlon Energy, the country’s largest wind power turbine maker and again making losses, says it aims to reduce 30-40 per cent of the INR 60 billion total debt by the end of this financial year. Mr JP Chalasani, group chief executive, told Business Standard that “We are actually aiming that by Q3 (the third or December quarter, we would be able to pare close to 30 per cent of the debt.”

It reported a net loss of about INR 3.8 billion in 2017-18, after a profit of INR 8.5 billion in FY17. Revenue dropped by 35 per cent to INR 82.9 billion. The change was mostly due to changes in the project award regime and a reduction in orders. Mr Chalasani said that the FY17 profit had come after six straight years of losses. Last year. 760 Mw of new projects were commissioned in the country and 626 Mw of that was built by Suzlon. In its quarterly results, it claimed to have 35 per cent market share in India. In 2017, the central government ended the 25-year-old Feed-in-Tariff mechanism for awarding wind energy projects, introducing competitive bidding. Capacity addition fell to a record low of 650 Mw but so did rates, by half, to INR 2.5 a Mw. Under FiT, the electricity regulator decided the rate.

Mr Chalasani said the falling rates put pressure on operations. He was hopeful that the government would award large projects and this would lead to sustainable growth in the near future for the company. Suzlon feels a wind energy rate of INR 2.5-2.7 is comfortable, if there are large projects of over 200 Mw. He said that “If the volume is large, it suits a company like us which has a vertically integrated business.”

Suzlon has seen the cancellation of many orders. As of end-March, the total of cancellations was 733 Mw. Mr Chalasani said that “Despite that, we have order visibility of 2,000 Mw. We are hopeful of increased orders as more auctions happen.”

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Posted By : Rabi Wangkhem on Fri, 27 Jul 2018
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