How Is This Utility Stock Performing: OPG Power Ventures PLC?

  • May 23, 2019 BST
  • Team Kalkine
How Is This Utility Stock Performing: OPG Power Ventures PLC?

OPG Power Ventures Plc (OPG) is a Douglas, Isle of Man, the United Kingdom-based electric utility company. The company owns, develops, maintains, and operates private sector power projects in India. It sells the electricity made from its plants to the heavy industrial companies, the short-term market, and public sector. It produces electricity from the coal source.

Trading Update – FY2019

The company’s profits were expected to be in line with market expectations. Total generation including deemed decreased by 2 per cent to 2.71 billion units as compared with the previous year data. PLF (Plant Load Factor) at Chennai stood at 75 per cent against 77 per cent reported in FY18. Average tariff surged by 10 per cent to Rs 5.41 as compared to the prior year data, due to the tariff increase for the captive customers. Term loan principal repayments of £20.6 million were made during the year.

Financial Highlights (H1 FY2019, £ million)

(Source: Interim Report, Company Website)

 

The company’s revenue surged from £66.5 million in H1 FY2018 to £77.9 million in H1 FY2019. EBITDA increased by 5.9 per cent to £14.4 million as compared to £13.6 million in H1 FY18. Profit before tax stood at £7.3 million and Earnings per share were 1.67 pence in H1 FY19 (H1 FY18: Loss per share 0.70 pence). Total Generation was up by 9 per cent to 1.55 billion units as compared with the H1 FY18 data of 1.42 billion units. Robust operational performance - PLF at Chennai - 85 per cent in H1 FY19 (H1 FY18: 73 per cent). In H1 FY19, Chennai average tariff was Rs 5.20. Profit from continuing operations stood at £6.5 million as compared with £2.1 million in H1 FY18. Average tariff surged by 7 per cent to Rs 5.58 effective from October 2018 for captive consumers. Coal prices declined by 23 per cent since the end of September 2018. In H1 FY19, term loan principal repayments stood at £10.3 million, gross debt was £85.9 million and working capital loans was £9.4 million.

Share Price Performance

Daily Chart as at May-23-19, before the market closed (Source: Thomson Reuters)

On May 23, 2019, at the time of writing (before the market closed, at 9:30 am GMT), OPG shares were trading at GBX 19.25, same against the previous day closing price. Stock's 52 weeks High and Low is GBX 28.30/GBX 8.84. Stock's average traded volume for 5 days was 198,325.20; 30 days – 395,321.87 and 90 days – 304,917.81. The average traded volume for 5 days was down by 49.83 per cent as compared to 30 days average traded volume. The outstanding market capitalisation was around £74.93 million.

Conclusion

The company is benefitting from continued coal price reductions since the period end. OPG has reported its financial statements since the Gujrat plant financials were de-consolidated. The group’s strong operational performance combined with the impact of recently increased tariffs and lower coal prices will allow to demonstrate robust profitability in FY2020. The Indian economy is expected to grow at a steady pace, resulting in higher demand for electricity and a high GDP growth rate. In FY2020, the group's term loans will continue to be repaid in accordance with their repayment plan.

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