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JSW Energy Ltd announces Q2 2011- 12 results
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Friday, 09 Nov 2012

Results far the quarter ended and half year ended September 30th 2011.

Key highlights:

1. Unit 3 of 135 MW at Barmer achieved COD on November 7th 2011.

2. 1200 MW power project at Ratnagiri fully implemented with the COD of unit of 300 MW.

3. Lignite mines at Kapurdi in Barmer, Rajasthan commenced operations

4. Rajasthan Electricity Regulatory Commission grants ad hoc interim tariff arder far Unit 1 to Unit 4; Unit 1 to 3 commenced generation while Unit 4 is being commissioned.

5. Net generation 5016 million units in H1, FY 2012.

6. Total income at 2269 crore in H1, FY 2012.

7. Entire debt of 41O crore far transmission project refinanced with effective savings of 2.26% in interest rate.

Operational Performance
The performance far the quarter was severely dented primarily due to

(i) The on set of an early and prolonged monsoon resulting in deferment of power procurement by distribution companies; frequent back down of the

(ii) Non availability of tariff for Barmer plant leading to idling of units

(iii) Steep depreciation in the foreign currency exchange rate in the last quarter.

The Plant Load Factor (PLF) achieved during 02, FY 2011-12 was as under:

The units have achieved average PLF of 72% as against 91% in the corresponding quarter of previous year. The PLF was lower mainly due to restrictions imposed on scheduling of power, deferment of power procurement by distribution companies and unscheduled plant maintenance.

The units operated at an average PLF of 74%, against an average PLF of 62% in the corresponding quarter of previous year. The operations were affected due to the heavy monsoon resulting in lower efficiencies in operations besides frequent back-down of units by the State Load Despatch Centre. The heavy monsoons impacted the timely commissioning of the 4th unit and also lead to delays in commissioning of the Jaigad to Karad transmission line.

The units continued to remain shut down during the quarter ended September 30th 2011 pending tariff approval by RERC. RERC has since provided an adhoc interim tariff for Unit 1 to Unit 4; consequently 2 units of 135 MW each have commenced operations from October 12th 2011 while Unit 3 achieved COD on November 7th 2011, the commissioning activities for Unit 4 have been taken up. The units are being operated using the lignite being supplied by BLMCL from the Kapurdi mines.

In arder to ensure effective plant utilization, Company had entered into banking arrangement for 286 million units and the banked power will be available for sale during the period November 2011 to March 2012 in tranches.

During the quarter, company has entered into a Conversion Agreement with JSW Steel Ltd. for conversion cubic feet gas provided by them into power on conversion basis.

The Company achieved short term sales cubic feet 1658 million units during the quarter ended September 30th 2011 as against 1141 million units sold in the corresponding quarter cubic feet the previous year.

The company sold 420 million units under long term PPA besides generating 229 million units on conversion basis and 286 million units on Banking Energy as against 640 million units sold under long term PPA during the corresponding quarter cubic feet the previous year.

The net generation from the different units was as under:

Q2, FY 11-12Q2 FY 2010-11

During the current quarter, the prices cubic feet imported coal continued to remain firm despite having risen by approximately 34% between Q2, FY 11 and Q2, FY 12 on API 4 index, even while a lot cubic feet commodity prices have witnessed significant downward correction due to the global slowdown. The fuel cost for the quarter was 762 crore, an increase of 65% over the corresponding quarter of previous year due to increased volume of generation as also the increase in prices of imported coal. The efforts of the company to increase reliance on consumption of Indonesian coal were impacted due to the heavy monsoon resulting in the operations relying on higher grade coal for sustained operations. However, with the monsoon having receded, the Company is relying on higher proportion of low grade coal to meet its fuel requirements.

South African Coal Mining Holding (Pty) Ltd (SACMH):
The Company had acquired 49.8% stake in Royal Bafokeng Capitai Ltd who hold 54.06% in SACMH. The Company also holds directly 34.79% in SACMH as on September 30th 2011 resulting in an overall stake of 61.71% in SACMH.

Further, the Company has acquired:
i) Balance 50.20% stake in RBC, upon exercise of the put option by Royal Bafokeng Ventures Proprietary Ltd.

ii) Entire share capital of Mainsail Trading 55 Proprietary Limited and including all amounts owing by the company to Mainsail upon exercise of the put option from RBH Resources Holdings Proprietary Ltd., a subsidiary of Royal Bafokeng Holdings Ltd. Pursuant to the acquisition, the effective shareholding of the Company in SACMH presently stands at 93.27%.

During the quarter, SACMH has mined 224,075 tonnes of raw coal from the existing block and sold 119,264 tonnes at an average realization of USD 111 per tonne. The margin continued to remain under pressure due to higher stripping ratio an account of development of new pits besides transportation bottlenecks resulting in higher logistics cast.

Financial Performance (Consolidated)
During the quarter, the Company achieved a total income of 996 crores, an increase of 18% aver the total income far the corresponding quarter of previous year, EBITDA of 181.02 crores, decline by 52 % aver the corresponding quarter in the previous year due to contraction in margins resulting from lower tariff realization and increased fuel cast. The Company has incurred a Loss after tax during the current quarter of 109 crores, primarily due to translation losses an foreign exchange monetary items and increased interest & depreciation charge upon commissioning of additional capacities.

The Company has considered the unrealized loss of 79 crores an the restatement of foreign currency monetary items at the close of the quarter as an exceptional item, due to the unusual and steep depreciation in the value of the Indian Rupee against US Dollar aver the last quarter.

During the quarter, the debt of Jaigad Power TransCo Ltd. of 41O crores was refinanced resulting in reduction in effective interest rate by 2.26%.

During the half year ended September 30, 2011, the company achieved total income of 2269 crores, EBITDA of 596 crores and Profit after Tax of 27 crores.

The consolidated net worth and consolidated debt as at September 30, 2011 was 5,672 crores and 9,809 crores respectively resulting in a consolidated debt equity ratio of 1.73 times.

Projects Update:
a) Status of projects under Construction and implementation 1,200 MW at Ratnagiri, Maharashtra Ali the units at Ratnagiri have been put into operation pursuant to the successful COD of Unit 4 on October 16th 2011. The implementation of the FGD is progressing on schedule in compliance with the conditions stipulated by MOEF. The project cost is estimated at 5,700 crores and project expenditure incurred till September 30th 2011 is 5,183 crores.

1,080 MW at Barmer, Rajasthan
Pursuant to the award of the adhoc interim tariff by RERC for Unit 3 & Unit 4, Unit 3 achieved COD on November 7th 2011 while commissioning activities for Unit 4 have been initiated in full swing. The work on the balance 4 units is expected to be completed by March 2012 in phases for the commissioning of the units. The project implementation has been hampered due to unavailability of manpower on sustained basis due to the extreme climatic conditions. With the extended time involved in completing the project, the cost is now estimated at 6,865 crores and project expenditure incurred till September 30th 2011 is 6,007 crores.

The Government of Rajasthan has granted the in principle consent for the expansion project of 270 MW at Barmer.

240 MW at Kutehr, Himachal Pradesh (HP)
The process of acquiring land for the project has been initiated with the execution of agreement with land owners while grant of requisite clearances for the project is awaited. The process for order placement for key contracts has also made good progress. Project expenditure spent till September 30th 2011 is 122 crores.

(b) Projects under Development
1320 MW Chattisgarh Project
The land acquisition for the project is progressing satisfactorily. The entire land acquisition is targeted to be completed by December 2011. The work on securing the clearances is also progressing satisfactorily.

1620 MW West Bengal Project
The works on the preliminary and peripheral activities are progressing as per schedule.

Source - JSW Energy Ltd


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