Torrent Power (TORNTPOWER) Q4 11/12 earnings summary

Executive summary

• FY2011-12 revenue rose 15.96% to ₹7,917.82 crore, PBDIT increased 9.66% to ₹2,355.82 crore, and PAT grew 16.11% to ₹1,237.46 crore.

• Power sales increased 3.25% to 14,983 MUs; lower generation reflected planned maintenance, reduced domestic gas availability and beneficiaries’ reluctance to buy costly LNG power.

Financial highlights

• Total income increased to ₹8,019.66 crore from ₹6,930.48 crore; PBT was ₹1,679.25 crore versus ₹1,428.39 crore, and PAT was ₹1,237.46 crore versus ₹1,065.72 crore.

• Depreciation declined 6.82% to ₹365.88 crore and interest expense declined 5.03% to ₹310.69 crore; the depreciation accounting change also raised FY PAT by ₹60.12 crore.

• Gross CER income reached ₹324.99 crore, up from ₹2.96 crore; ₹3.30 crore was payable to long-term beneficiaries under CERC rules.

• Aggregate dividend was ₹6.50 per share, including ₹3.00 interim and ₹3.50 recommended final special dividend; total dividend outflow including tax was ₹356.90 crore.

Outlook and guidance

• Operations at Agra were expected to stabilize in FY2012-13 through network upgrades, undergrounding, improved meter reading and lower AT&C losses.

• The 382.5 MW UNOSUGEN project was under development, with major equipment at site; it was expected to meet about 278 MW of additional Ahmedabad and Surat demand.

• The 1,200 MW DGEN project was progressing with equipment delivered and erection underway; long-term open access had been granted for its full capacity.

• Pipavav land possession remained difficult despite compensation to more than 80% of landowners; environmental assessment work was underway for the allocated coal mine.

• A 1,320 MW Sandila coal project had an MoU, environmental study completion and an approved long-term PPA for 90% of power.