Suzlon Energy announced the Q3 results after market hours Thursday, 14 February 2013.
Meanwhile, the BSE Sensex was down 64.42 points, or 0.33%, to 19,432.76
On BSE, 64.49 lakh shares were traded in the counter as against an average daily volume of 80.59 lakh shares in the past one quarter.
The stock hit a high of Rs 21.90 and a low of Rs 19.75 so far during the day. The stock had hit a 52-week high of Rs 32 on 22 February 2012. The stock had hit a record low of Rs 14.75 on 31 August 2012.
The stock had outperformed the market over the past one month till 14 February 2013, advancing 19.95% compared with the Sensex's 2.06% fall. The scrip had also outperformed the market in past one quarter, surging 51.76% as against Sensex's 4.72% rise.
The mid-cap wind turbine maker has an equity capital of Rs 355.47 crore. Face value per share is Rs 2.
Suzlon Energy's consolidated net sales fell 19.5% to Rs 4013.66 crore in Q3 December 2012 over Q3 December 2011.
Mr Tulsi Tanti, Chairman, Suzlon Group said: This has been a significant quarter for the Group; even as our operating performance was negatively impacted by liquidity constraints, we achieved the major positive step regarding the approval of our Corporate Debt Restructuring (CDR) package. This not only underscores the long-term viability of our business, but is a catalyst towards normalizing our operations.
Looking back, 2012 was a challenging year for the wind energy sector at large; macro-economic conditions and policy challenges affected markets worldwide. While we anticipate that near-term challenges will continue to impact the industry over 2013, there are some green-shoots across global markets. For example, the continuation of the Production Tax Credit (PTC) program for wind energy in the US; the likely reinstatement of support mechanisms for renewables in India; a stable outlook for Europe; and, continued growth in the offshore segment. This, combined with our global presence and order book of US$ 7.7 billion, gives us confidence in the medium-term outlook for the Group, and for the sector overall.
Mr Kirti Vagadia, Chief Financial Officer, Suzlon Group said: Over FY13 we have faced a textbook conflict in allocation of resources between our business and our liabilities. While we have made tremendous progress on the liability management front, our business performance has been adversely hit due to our abnormal operating environment, leading to a significant loss for the quarter.
Looking ahead, the approval of CDR is a major step in the right direction - this now gives us the headroom to focus on the execution of our order book, maintain and grow our order momentum, and to continue to deliver the right products and services to meet the needs of our global customer base.
It is important to note that the long-term fundamentals of the business continue to be strong: our fleet of over 21,000 MW worldwide continues to deliver industry beating uptime levels; our order inflows remains strong - with a significant uptick after the approval of our CDR package; as well as strong growth momentum in certain key markets, and particularly at the REpower level. We have made solid progress under Project Transformation, and we continue to focus on reducing our opex and manpower costs, translating to a lower breakeven for the Group going forward.
In terms of market outlook Suzlon Energy said that independent estimates project 2012 to be a record year for wind installations despite macroeconomic headwinds and policy uncertainties. However, lower order intake during 2012, due to policy deterioration in some parts of Europe, such as Spain and Italy, and uncertainty around the PTC in the US, is expected to result in a temporary dip in installation in CY13, followed by a sustained recovery through 2016, with industry CAGR projected to reach 5.5% over the 2011- 2016 period.
The offshore wind market in Europe grew 35%, year-on-year, between CY11 and CY12, and is expected to grow at 31% CAGR between 2011 and 2016. The UK and Germany will continue to dominate the European market throughout the period, supported by strong incentive schemes, including offshore targets of 18 GW and 10 GW, respectively.
The Suzlon Group orderbook stood at approximately 5.7 GW (approximately Rs 41546 crore/ $ 7.7 billion) as on 14 February 2013; with new firm orders of 1,104 MW signed over the quarter. Significant orders over the period included Cookhouse, South Africa for 139 MW and EDF, Canada for 359 MW. The Group has secured firm order wins of approximately 2,631 MW year till date FY13 despite a very challenging operational environment.
Suzlon Group's wholly-owned German-subsidiary, REpower Systems SE, continued to grow at a healthy pace with support from Group on markets, project execution synergies and cost reduction. Over the course of the year, REpower has consistently posted the best operating metrics in the industry, growing revenues by over 58% compared to the first nine months of FY12, and achieved robust order intake momentum and best-in-class order coverage ratio. REpower also signed its largest onshore contract till-date at 359 MW (as announced on 31st January, 2013); crossed 1 GW of orders for the UK; entered the Romanian market; launched the 3.0 M122 turbine specifically for low wind sites; and crossed 1 GW of installations in the USA with 481 turbines erected in 2012 in North America.
The Suzlon Global fleet stands at over 21,000 MW installed in 32 countries, generating the approximate equivalent of the power consumption of 70 million people. Suzlon's newest models - the S95 and S97 2.1 MW turbines have achieved an installed base of approximately 400 MW, and along with the rest of the fleet are delivering 97 to 99% availability. The North American market achieved a record year of installations as well for the Suzlon group with over 1 GW installed.
Suzlon Group on 24 January 2013 announced the formal approval of its proposal for the restructuring of its domestic debt. The company's domestic lenders, a consortium of 19 banks, approved the company's CDR package of approximately Rs 9500 crore/ $1.8 billion.
The package includes a two year moratorium on principal and interest payments on term loans; a 3% reduction in interest rates; six month moratorium on working capital interest; as part of the package Rs 1500 crore/ $270 million (two year's interest payment during moratorium) will be converted into equity / equity linked instrument over the next two years to bring stronger financial stability; and, a 10 year door-to-door back-ended repayment plan.
The package also includes an enhancement of working capital facilities, by approximately Rs 1800 crore/ $350 million, allowing the company to accelerate the execution of its strong orderbook.
Meanwhile, Suzlon Energy's board of directors at its meeting held on 14 February 2013, has decided to close its Rotor Blade and Control Panel manufacturing units at the Puducherry (Pondicherry) manufacturing facility. The decision follows on account of the challenges faced in industrial relations at the manufacturing facility coupled with logistical issues faced by the facility in handling multi-MW wind turbine components of increasing size and the current financial position of the Company. This, however, does not include the Nacelle unit at the same facility, which could see utilisation as a service centre, Suzlon said. This would also help the company in reduction of opex and working capital intensity as well as rationalise capacity in the company's supply chain, it added.
The Suzlon Group is ranked as the world's fifth largest wind turbine supplier, in terms of cumulative installed capacity, at the end of 2011. The company's global spread extends across Asia, Australia, Europe, Africa and North and South America with installations of over 21,000 MW and operations across 32 countries and a workforce of approximately 13,000. The Group offers one of the most comprehensive product portfolios - ranging from sub-megawatt on-shore turbines at 600 Kilowatts (KW), to the world's largest commercially-available offshore turbine at 6.15 MW - with a vertically integrated, low-cost, manufacturing base. The Group - headquartered at Suzlon One Earth in Pune, India - comprises Suzlon Energy and its subsidiaries, including REpower Systems SE.
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