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Sterling and Wilson Solar has reported a 44.6 per cent fall in net profit for financial year 2020 due to delays in commencement of a few projects.
The profit for FY20 stood at ₹356 crore, when compared to FY19 when the Shapoorji Pallonji Group company, which is into Engineering, Procurement and Construction (EPC) of solar projects, posted a ₹643.6 crore profit.
On a quarterly basis, net profit was ₹164.5 crore, down 45.2 per cent when compared to ₹300.2 crore posted in the March-ended quarter of 2019.
Revenues for the fiscal came in at ₹5,878.7 crore, down 30.4 per cent compared to ₹8,449.9 crore posted in fiscal 2019. For the March-ending quarter, revenues stood at ₹2,120.5 crore, a 10.4 per cent decline compared to ₹2,368.1 crore posted in the year-ago period.
As Covid-19 has been declared a global pandemic, the event is classified as force majeure, per contract terms and any associated delay in project execution will not lead to liquidated damage claims or invocation of performance or bank guarantees by the clients, Sterling and Wilson said.
The company also has repaid Inter-Company Deposits amounting to ₹1,512 crore from August till 31st March 2020 which has been utilised for repayment of external term debt. Its Net Inter-Company Deposit balance as on March was ₹1,217 crore. Bikesh Ogra, Director and Global CEO, Sterling and Wilson Solar Limited, said: “The recent months have been a difficult phase, both for the global economy and the company, due to the Covid pandemic. With the Covid situation relatively stabilising globally and our existing order book pipeline, along with the foreseeable future business, we expect that the turnover and profitability in the current year will be better than last fiscal, provided the Covid situation does not escalate in our target markets.”
At the end of March, Sterling and Wilson had a portfolio of 10.6 GWp (completed and under various stages of construction) and Operations and Maintenance portfolio of 7.5 GWp. Sterling and Wilson had gross unexecuted orders worth ₹11,396 crore on March 31, 2020, compared to ₹7,740 crore in March 2019. Further, it has 7.5 GW of Operations and Maintenance contracts in March 2020, compared to 5.6 GW in March 2019.
On the outlook, Sterling and Wilson said that with the resumption of Solar PV panels and other critical equipment, the company has resumed execution at its international projects in the US, Australia, Chile and Oman. “Our O&M services largely remain unaffected. The project execution in geographies like India, Kenya and Jordan were impacted due to logistical challenges during the lockdown. Now, there has been a partial easing out of restrictions in various countries leading to a gradual increase in the pace of project execution,” said Ogra.
During the fiscal year, Sterling and Wilson generated cashflow from operations of ₹338 crore as compared to a negative cashflow of ₹723 crore in FY19. The Gross Profit Margin for FY20 improved and was 12.8 per cent, when compared to 11.9 per cent for FY19.
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