Singapore-based Sembcorp Industries' India arm Sembcorp Energy India (SEIL) swung back into black in 2018, reporting an annual profit of Singapore dollar (SGD) 47 million (about Rs 247 crore).
SEIL reported a turnover of SGD 1.686 billion (about Rs 8,873 crore) in 2018 amid stress in the power sector.
The company, part of Singapore-listed Sembcorp Industries (SCI) group, had reported a loss of SGD 58 million and a turnover of SGD 1.592 billion in 2017. SEIL's results are part of SCI's annual results that were announced Thursday.
The Indian arm of Sembcorp has also won a 500 megawatt (MW) power supply contract from Andhra Pradesh for eight years and has secured the Letter of Award (LoA) from the state, SCI said in a release announcing the results.
The LoA is subject to regulatory approvals, it added.
Sembcorp Energy is also looking to commission 550 MW new renewable energy projects in India during the current year, the company said, adding it continues to monitor market conditions for a potential IPO and its long-term outlook for the Indian power market remains positive.
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"The India energy business is expected to improve, underpinned by a positive long-term outlook for the India power market," it further said.
According to the results, SCI reported a 30 per cent increase in turnover to SGD 11.7 billion, while its net profit was down 9 percent to SGD 383 million. The company follows the January-December financial year.
At present, Sembcorp Energy India has a total capacity of 4.37 gigawatts (GW), comprising 2.64 GW thermal power projects in Andhra Pradesh and over 1.7 GW renewable energy projects (including the under-construction ones) that are spread across the country.
In October 2018, it had become the first company to commission a project (of 250 MW) that was won in India's first central wind energy auctions.
The Indian power sector, particularly on the thermal side, is facing tremendous financial stress. The Parliamentary Standing Committee on Energy had estimated in August 2018 that power projects having a cumulative capacity of over 66,000 MW are under various degrees of financial stress.
The situation worsened post a notification of RBI on February 12, 2018, which discontinued all previous schemes for resolution of stressed assets and put a timeline of 180 days for implementation of resolution plan.
The RBI circular has been challenged by various power companies and currently the matter is pending before the Supreme Court.
In the meantime, the government constituted a High Level Empowered Committee (HLEC) under Cabinet Secretary P K Sinha to deal with the situation.
HLEC's report, that has suggested several innovative methods to mitigate the stress, is currently pending before the government for approval.