23 October 2013
OPG Power Ventures plc
("OPG" or the "Company")
Chennai III sales contract extended
Impact of recent Rupee volatility offset by strong operational performance
OPG Power Ventures plc, the operator and developer of power plants in India, reports the following developments:
80 MW Chennai III sales contract extended until May 2014
At the time of our update on 29 Jul 2013 we reported that the Company had entered into a contract to sell power from its newest plant, 80 MW Chennai III to the Tamil Nadu State Electricity Board ("TANGEDCO") until 30 September 2013. The Company is pleased to announce that it has agreed to extend that agreement and supply 74 MW from that plant to TANGEDCO at Rs 5.50 per kWh until 31 May 2014.
In aggregate, the Company now supplies 214 MW from its three operating Chennai plants to TANGEDCO under arrangements continuing until May 2014. Following delayed payments made during FY 2012, TANGEDCO is now up to date with its payments to the Company for electricity.
Impact of Indian Rupee volatility in year to date offset by strong load factors
The Indian Rupee ("Rupee") has depreciated by approximately 13% against the USD and 18% against GBP since April 2013 with much of this volatility having arisen in August 2013 and with some recovery during the following month.
Whilst this Rupee depreciation has resulted in a higher coal cost in Rupee terms for the coal imported by the Company (and paid for in US Dollars), the effect of this has been largely offset by the strong load factors and a better than expected operating performance by our three operational units. In addition, over the last few months the Company had entered into selective hedging arrangements in relation to short term trade payables to better manage the impact of currency volatility on coal purchases. The Board believes that the adverse impact of the Rupee's recent devaluation upon coal costs has been largely offset.
Furthermore, the Company has no long term borrowings in foreign currencies and principal capital debt contracts are denominated in Rupees.
About OPG
OPG is operating and developing power projects in India under the group captive model with 270 MW in operations and a further 472 MW under development. In the year ended 31st March 2013, Group revenues were £56m, EBITDA was £17.7m and profit before tax was £10.5m.
For further information, please visit www.opgpower.com or contact:
OPG Power Ventures PLC |
+91 (0) 44 429 11 211 |
Arvind Gupta |
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V Narayan Swami |
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Cenkos Securities (Nominated Adviser & Broker) |
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Stephen Keys / Camilla Hume |
+44 (0) 20 7397 8900 |
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Tavistock Communications |
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Simon Hudson |
+44 (0) 20 7920 3150 |
