August 1, 2009
Suzlon reports consolidated revenues of INR 4,153 cr.
- Orderbook: Suzlon 1,501 MW; REpower 1,231 MW
- Blade retrofit 90% complete, no additional provisions
- Improved product performance across all geographies
- Achieved reduction in working capital
- Blade supply to REpower in China commenced
- Sales back-ended in FY10
Mumbai: Suzlon Energy Limited, the worlds third largest* wind turbine supplier group
with a joint market share of 12.3%, reported consolidated revenues of INR
4,153 cr. for the first quarter of FY2009- 10, compared with INR 3,118 cr for
Q1FY09. Profit/(Loss) After Tax for the quarter (including FCCB FX effect) stood
at INR (453) cr.
The Suzlon orderbook (excluding Hansen and REpower) stood at 1,501 MW, as on July
30, 2009. The REpower orderbook stood at 1,231 MW as on 30th June, 2009.
Key Updates:
Blade Retrofit Program 90% Complete: The planned retrofit program to
strengthen all V2 blades is underway with approximately 90% of the project completed
as on date. The program is scheduled for completion in August, 2009, with no further
provisioning needed.
Long-term Fund Raising: Suzlon successfully undertook strategic fund raising of
USD 202 mn. Suzlon issued Global Depository Receipts (GDRs) of USD 108 million,
and secured USD 94 million through an issue of Zero Coupon Convertible Bonds.
Order Outlook: Suzlon achieved an orderbook of 1,501 MW and INR 8,316 cr. as on
30th July, 2009, with 66 MW (INR 380 cr.) in domestic orders and 1,435 MW (INR
7,936 cr.) in international orders.
REpower reported a confirmed order book of 1,231 MW as on 30th June, 2009, with a
contractually confirmed order volume of EUR 1.45 billion and more than EUR 5 billion
in framework agreements and firm contracts.
Suzlon has also commenced supply of blades to REpower in China, following successful
prototyping and achievement of specific technical criteria.
Market Landscape: The global wind markets have continued to feel the impact of the
credit crisis and overall macro-economic conditions. Financing issues continue to be a
short-term challenge, however strong worldwide policy support and cost-
competitiveness continue to drive a strong long-term outlook, with the industry
projecting a revival from end-2009. China announced new feed-in-tariffs in place of
the existing public bidding process, creating a highly competitive market landscape.
The US has announced new measures under the stimulus program with provisions for
cash grants in lieu of tax credit supports opening up the market to newer investors.
Several states in India have announced favourable revisions to purchase prices for
wind power adding to wind energys competitive advantage.
Speaking on the industry Mr. Tulsi Tanti, Chairman and Managing Director of
Suzlon Energy Limited, said: Despite some momentum being lost, we see
governments around the world continuously building strong policy frame-works to
support the growth of renewable energy. Stimulus packages announced by
governments around the world have dedicated funds of approximately USD 163
billion** to green energy, with much of the impact expected to happen in 2010,
driving alongside the overall economic revival the world over.
Speaking on the companys performance, Mr. Sumant Sinha, COO Suzlon
Energy Limited, said: We have continued our focus on consolidation in the quarter,
and are pleased to report a steady improvement in the health of the operations. We
have achieved a gradual reduction in working capital intensity, stabilization of
inventory levels and reduction in receivables at the Suzlon Wind level. We have also
brought extraordinary costs under control, and are on track with the blade retrofit
program with no new provisions needed. We have launched a focused operations cost
reduction program targeting significant reduction on costs.
While we have registered growth in revenues at a consolidated level, our profits have
lagged due to lower quantity of sales at the Suzlon Wind level. This has been caused
by multiple factors such as the delayed budget impacting orders in India, and
customers in international markets postponing deliveries to the second half of the
financial year. For the full year - we see volumes picking up significantly in the second
half, normalising the effect of the first half. On a market-wide level, we see the wind
industry revival starting end-2009 with the US stimulus package catalyzing growth in
the US and also other markets with the full impact of the stimulus packages likely to
be felt in 2010 and 2011 revitalizing the wind industry.
