JSW Energy (533148) Q4 13/14 earnings summary

Executive summary

• FY14 was the first full year at 3,140 MW; consolidated EBITDA rose 14.87% to ₹3,453.61 crore, while PAT fell 16.48% to ₹754.74 crore.

• Consolidated revenue from operations declined 3% to ₹8,705.42 crore; lower sales volumes and exceptional FX losses weighed on earnings.

Financial highlights

• Consolidated revenue from operations was ₹8,705.42 crore vs ₹8,934.30 crore; EBITDA before exceptional items ₹3,453.61 crore vs ₹3,006.62 crore; PAT ₹754.74 crore vs ₹903.65 crore.

• Standalone revenue from operations was ₹5,802.61 crore vs ₹6,396.45 crore; EBITDA before exceptional items ₹2,267.57 crore vs ₹2,410.52 crore; PAT ₹602.48 crore vs ₹993.03 crore.

• Consolidated exceptional items of ₹377.69 crore included ₹319.96 crore net FX loss, ₹65.78 crore South African asset impairment and ₹8.05 crore profit on sale of PTPUJ investment.

• Standalone exceptional items of ₹370.21 crore included ₹321.46 crore net FX loss, ₹56.60 crore provision for doubtful subsidiary advances and ₹7.85 crore investment-sale gain.

Outlook and guidance

• Installed capacity expansion plans target an increase of 8,360 MW beyond the 3,140 MW operating base, with new projects dependent on clearer fuel and power offtake arrangements.

• Strategy prioritizes long-term PPAs to reduce merchant exposure; capacity growth is planned through organic and inorganic options, supported by balance-sheet strength and free cash flow.

• Management cited benign imported coal prices as a possible support to fuel costs; tariff issues at Raj WestPower were targeted for resolution during FY15.

• Sector growth potential was put at 7–8% p.a.; execution depends on reforms to T&D losses, State Electricity Board finances and fuel linkages.