High cost of finance has added to the woes of wind energy company Suzlon Energy Ltd that has posted a consolidated net loss of Rs 849 crore during the first quarter of the current fiscal against a profit of Rs 60 crore in the same quarter of last year.

Income from operations in the quarter under review rose 10 per cent year-on-year to stand at Rs 4,747 crore.

During Q1, Suzlon’s losses before finance cost stood at Rs 358 crore. The cost of finance during the three-month period ended June 30 was Rs 494 crore (against Rs 360 crore in Q1 12), adding to the total loss. While it suffered a forex loss of Rs 92, total expenses rose 30 per cent over the same period of FY12 to Rs 5,206 crore.

On a standalone basis, Suzlon posted a loss of Rs 697 crore on an income of Rs 596 crore, against a profit of Rs 138 crore on an income of Rs 1,469 core for the same period last year.

At the company’s AGM in Ahmedabad , Tulsi Tanti, Chairman, Suzlon Group, said, “This has been a disappointing first quarter. The macroeconomic environment, policy uncertainties in some markets, along with other external factors such as the depreciating rupee continue to impact us. Although we met our June FCCB liability in full, this absorbed a lot of management time and attention.”

The company is embarking on the Project Transformation, a programme aimed at reducing annual opex and manpower cost by 20 per cent by the end of the year, Tanti said, adding that he remained cautiously optimistic about ending the fiscal in a satisfactory position.

Bharati Rao, former Deputy Managing Director, SBI, has joined Suzlon’s Board as an independent director and nominee of SBI on behalf of consortium of lenders. Shareholders also approved the appointment of Marc Desaedeleer as Director, and an enabling (omnibus) resolution to issue securities to facilitate raising of funds to meet business requirements.

alka.k@thehindu.co.in

(This article was published on August 13, 2012)
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