JSW Energy Q2 profit surges as fuel costs dip

JSW Energy has reported higher net profits on the back of decline in fuel costs, on account of moderation in imported coal prices.

The Sajjan Jindal-backed $14 billion JSW Group company, raked in profits of Rs 302.7 crore, a 15.79 per cent growth when compared to the Rs 316 crore it posted in the same period last year. The fuel cost for the quarter decreased by 26 per cent on a yearly basis to Rs 983 crore.

However, revenues for  JSW Engery went down by 13.08 per cent, mainly due to industrial slowdown, resulting in lower power demand pickup.  Revenues were Rs 2,231 crore, compared to Rs 2,567 crore in the year ago period.

In Q2 of this financial year, India’s power demand growth declined to 1.6 per cent from 6.8 per cent when compared on a yearly basis. “This was mainly attributed to heavy rains and floods in West and South India. Excluding North, all other regions witnessed a subdued demand growth on a yearly basis, said Prashant Jain, Joint MD and CEO, JSW Energy. EBITDA for the quarter went up by 5 per cent from 998 crore to Rs 1,048 crore.

Renewable and Thermal generation declined by 9.2 per cent and 2.5 per cent respectively, while Hydro grew by 9.1 per cent on a YoY basis. Plant Load Factor (PLF) for Thermal segment was lower at 52.5 per cent in Q2FY20 lower when compared to 57.6 per cent in the corresponding quarter of last fiscal, for the sector. PLF is used to determine a plant’s power producing capacity. On the supply side, installed capacity stood at 363.4GW at the September-ended quarter. “This was led by 5.1 GW of thermal capacity addition and 2.8 GW of renewable energy additions,” said Sharad Mahendra, Director and chief operating officer, JSW Energy.

The company which has set a target of 10 GW of capacity addition in the next 3-5 years, said that the Committee of Creditors of Ind-Barath (Utkal) have approved the company’s resolution plan under the corporate insolvency resolution process for a 700 MW under-construction thermal power plant in Odisha. The closre of the transaction shall be subject to approval from NCLT. As a part of this, JSW will pay upfront Rs 1,000 crore to lenders. The project construction has started and it will be finished in the next 12-24 months, as it is not an operating plant and requires clearances for part rail connectivity to source coal, said Mahendra.

Australian asset manager Macquarie had moved the National Company Law Tribunal (NCLT) to start insolvency proceedings against Ind-Barath Energy (Utkal).

JSW Energy is also in exclusive discussions to acquire GMR Kamalanga Energy which owns a 1050 MW operating thermal power plant in Odisha. Of this, 85 per cent capacity is tied up with Power Purchasing Agreements (PPA), said Jain.

It has also commenced construction of 240 MW Kutehr hydro power plant in Himachal Pradesh after the Haryana Power Purchase centre accepted its offer to supply hydro power and filing necessary petition for approval with Haryana Electricity Regulatory Commission. Mahendra said that it will take 54 months to commission the plant and requires investment of Rs 3,000 crore, of which Rs 300 crore has already been spent.

The project construction has started and it will be finished in the next 12-24 months, as it is not an operating plant and requires clearances for part rail connectivity to source coal, said Mahendra. Additionally, JSW Eenergy said that its Karchan Wantoo hydro energy project haas achieved its highest PLF in the second quarter of this fiscal.

The consolidated net debt of JSW Energy came in at Rs 9,702 crore, resulting in a Net Debt to Equity ratio of 0.83x, led by reduction in finance costs.

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