The company reported “another strong operational performance” by the group's Chennai plant in the nine months to the end of 2018.
Total generation in the reporting period, expressed in millions of units (or kilowatt hours of equivalent power), rose 4.5% to 2,145 from 2,053 in the corresponding nine-month period of 2017.
The plant load factor at Chennai was 79%.
The group said the increase in generation was primarily due to higher plant availability and increased demand by industrial customers as a result of which fiscal 2019 underlying earnings (EBITDA), profit before tax and profit after tax are expected to be within market expectations for the full year.
The average tariff was 5.33 rupees (Rs) following a 7% hike to Rs5.58 in October for what OPG calls captive consumers.
While the tariff charged by OPG headed higher, coal prices reduced by 4% from the end of September to the third week of February.
At the end of 2018 borrowings stood at £87.5mln (Rs7.75 billion), including term loans of £76 million (Rs6.74 billion) and working capital loans of £11.5 million (Rs1.01 billion).
Gross debt is higher than previously projected on account of an increase in working capital loans that were used primarily to repay trade payables and purchase coal inventory plus the foreign exchange impact the rupee weakening against sterling.
The trend in debt should start reversing when Chennai IV recommences production (expected by mid-March). After scheduled repayments, term loans are expected to reduce to £69.1 million (Rs6.32 billion) at 31 March 2019, assuming a 91.5 INR/GBP exchange rate, as projected.
The board is confident that Unit IV of the Chennai plant will shortly return to normal operations and will provide strong operational performance.
The Indian economy is expected to be the fastest growing major economy resulting in high GDP growth and higher demand for electricity, OPG declared; as a result, looking forward to fiscal 2020, the company is expected to benefit from robust tariffs and the projected level of coal prices.
Term loans will continue to be repaid in accordance with their repayment schedule and the company expects to maintain its long term profitability and sustainable business model.