Trading Update

RNS Number : 1480V

OPG Power Ventures plc

26 January 2017

 

26 January 2017

OPG Power Ventures plc

("OPG", the "Group" or the "Company")

Trading update

OPG Power Ventures PLC, the developer and operator of power plants in India, announces the following update. In early November 2016, the federal government announced the de-monetisation of high denomination currency (Rs.500 & Rs.1000 bills which amounted to 85.5% of the currency in circulation).  This degree of overnight contraction in currency supply had an effect on short term consumer spending across the country, which has impacted some of our customers and therefore their near term demand for electricity.  As the short term effect of this gradually subsides, there is a widely held view that the event will act as a significant positive on the long term sustainable growth of India's economy.  We believe we have been able to largely mitigate the impact to date of this event through the diversity of our customer base.

December 2016 witnessed the sad passing away of the Tamil Nadu Chief Minister, Ms Jayalalithaa Jayaram. Given Ms Jayalalithaa's immense popularity, commercial activity in Tamil Nadu was understandably at a low ebb for about a week just after her passing.  Shortly thereafter, Cyclone Vardah hit the northern parts of the state.  This cyclone caused only minor damage at the plant, which was quickly returned to near full availability, but it severely impacted regional transmission infrastructure as well as commercial activity.  As the transmission system is being restored and commercial activity for our customers is returning to normal, the Chennai plant too is gradually resuming full service with load factors expected to normalise from February 2017. 

Taking the impact of these events together, the Board has refined its expectations for the Chennai plant to achieve a reportable load factor of approximately 76% for FY17 as a whole, compared with the expectation indicated at the time of the Company's half year results of around 80%.  This corresponds to a reduction in revenue estimates of around £5-6m.  

The Directors believe that the Group's modular assets, capex planning, gearing levels, dual location and highly diversified customer base enable the Group to manage the impact of such unforeseen events.  In addition, the pursuit of a group captive business model has served to cushion against such unfortunate instances.  The Board remains confident about the Group's prospects. 

The Group's Q3 update is due to be issued on 28^th February 2017.

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

OPG Power Ventures PLC Arvind Gupta / V Narayan Swami	[phone]
OPG - Investor Relations Ajay Paliwal / Pooja Maru	[phone]
Cenkos Securities (Nominated Adviser & Broker) Stephen Keys / Camilla Hume	[phone]
Macquarie Capital (Europe) Limited (Joint Broker) Raj Khatri / Nick Stamp	[phone]
Tavistock (Financial PR) Simon Hudson / James Collins / Barney Hayward	[phone]

OPG operates and develops power generation related assets in India and at 30^th September 2016 had 750 MW of assets with a further 186 MW under development or in pipeline.  In the six months ended 30^th September 2016, according to its unaudited results for the period, the Company generated revenues of £118 million, EBITDA of £41 million, profit before tax of £18 million and earnings per share of 4.80 pence.

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