The Hindu Business Line : REpower net earnings down 98%

Chennai May 15 Even as Suzlon and France's Areva battle it out for the takeover of Germany's REpower Systems, the latter has turned in disappointing results for the first quarter of 2007 ended March 31.

Post-tax earnings sunk 98 per cent to € 15,000 compared to € 800,000 in the same period in 2006.

Operating earnings were lower by 81 per cent at € 0.3 million compared to € 1.6 million in the first quarter of 2006.

However, revenues were 41 per cent higher at € 125.4 million (€ 88.8 million ).

Delayed deliveries

REpower has attributed the fall in income to delayed deliveries from suppliers which meant that a large number of wind energy turbines could either only be partly completed or could not be put into operation by the end of the quarter. The company installed and recognised income for 32 turbines during the quarter compared to 64 turbines in the same period last year.

The REpower stock fell marginally during early trading to € 161 but it was still higher than the € 150 offered by Suzlon. The latter's bid discounted REpower's 2006 earnings (EPS of € 0.94 ) by 160 times, which by itself was on the higher side according to analysts.

With the first quarter earnings almost down to nil, the valuation accorded to REpower by Suzlon would seem that much more higher now.

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