Trading Update

RNS Number : 8438Y

OPG Power Ventures plc

28 February 2013

 



28 February 2013

OPG Power Ventures plc

("OPG" or the "Company")

Trading update

Operating assets performing ahead of expectations and Chennai III on track for Q2 2013

OPG Power, the developer and operator of power stations in India, presents the following trading update for the three months ended 31 December 2012.

Operations summary - quarter ended

Plant	Generation (Mn Units)			Ave tariff realisation (Rs/kWh)			Plant Load Factor(%) based on name-plate capacity
	31/12/12	30/09/12	31/12/11	31/12/12	30/09/12	31/12/11	31/12/12	30/09/12	31/12/11
77MW C I	155	171	158	5.55	5.69	5.09	91	100	93
77MW C II	146	n/a	n/a	5.51	n/a	n/a	96	n/a	n/a

77 MW Chennai I performing strongly

The Company's 77 MW Chennai I plant achieved an average Plant Load Factor (PLF)of 91% during the three months ended 31 December 2012.This was in line with expectations and, with load factors in January 2013 being marginally higher than name-plate capacity, we continue to remain confident of this unit achieving a PLF of 90% for FY2013 as a whole. 

77 MW Chennai II - stronger than expected ramp up to date

In addition 77 MW Chennai II achieved a PLF of 96% during the three months ended 31 December 2012, its commercial operations having commenced in early October.  The ramp up of this unit since its commissioning has been stronger than we had anticipated, with load factors in January 2013 being slightly higher than name-plate capacity.  Accordingly, we have updated our expectation from this unit to a PLF of just over 90% for FY2013, up from our previous expectation of 85%. 

Along with the gas and waste heat plants from which the financial contribution remains negligible, the Group's commercial operating capacity remains at 190 MW.

Average tariff

In line with our flexible revenue model, our present strategy is to sell most of our power from Chennai I and II to TANGEDCO (Tamil Nadu state utility) at Rs5.50/kWh on a term contract ending May 2013 and accordingly we expect the average tariff for FY2013 to be in the range Rs5.50-5.55/kWh, compared with Rs4.93/kWh actually achieved in the prior year.  Transmission charges are not payable on power sold to TANGEDCO.   

Costs

Landed cost of imported coal declined by approximately 3% compared with the immediately preceding quarter principally on account of the prevailing term contract with our Indonesian coal supplier. 

80 MW Chennai III - on track to commission in Q2 2013

The Company's 80 MW Chennai III for which equity finance was derived from internal cash flows is approaching completion.  Hydro testing has been completed successfully as has boxing up of the turbine.  Photographs of the nearly completed unit and the associated coal handling facilities have been uploaded to the Company's website.  The unit is expected to enter our rigorous test phase before the end of May beyond which commissioning trials would commence.  The plant is on track to commission in the next quarter. 

160 MW Chennai IV

The 160 MW Chennai IV is in the advanced civil works phase of construction.  As the floor plate of the plant is adjoined to the existing plant, infrastructure such as roads and access ways are shared with Chennai I,II and III and are thus already in place.  The next key step is for major equipment deliveries to commence.  The plant remains on track for commissioning in 2014. 

2x150 MW Gujarat

The 2x150 MW Gujarat project is progressing well with boiler and chimney foundations complete and boiler erection, and electrical works commenced.  One of the boiler drums is expected to be lifted and installed in the next few weeks, a significant milestone for the project as it facilitates the construction of the balance of the plant to commence. Chimney construction has already commenced.  The project remains on track for commissioning in the second half of calendar year 2014.

Supply and demand fundamentals continue to be supportive

With the financial restructuring of many state utility companies bank lending to the Indian electricity sector is resuming gradually.  Although official statistics indicate the pace of national GDP growth has slowed to over 5%, this is considerably in excess of most of the developed world and per capita electricity consumption in India remains comparatively low.  In addition, economic reforms continue as part of government policy.  Accordingly, we continue to believe that even with a weak rupee and high interest rates, strong supply/demand fundamentals remain in place.

About OPG

OPG is operating and developing power projects in India under the group captive model with 190 MW in operations and a further 552 MW under development. In the six months ended 30 September 2012, the Group's revenues were £17.8m and profit before tax was £2.5m.

For further information, please visit www.opgpower.com or contact:

OPG Power Ventures PLC	[phone]
Arvind Gupta
V Narayan Swami Ajay Paliwal	[phone]
Cenkos Securities (Nominated Adviser & Broker)
Stephen Keys / Camilla Hume	[phone]
Tavistock Communications
Simon Hudson/Kelsey Traynor	[phone]

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