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OPG Power Ventures plc (LSE:OPG), a developer and operator of power generation assets in India, has announced its final results for the fiscal year ending March 31, 2024 (FY24). The company has demonstrated a strong recovery in revenues and overall financial performance, with its Chennai operations contributing significantly to these results.
For FY24, OPG reported a substantial increase in revenues, reaching £155.7 million, compared to £58.7 million in FY23. This impressive growth highlights the strong performance of its Chennai power generation assets, as well as the stabilization of coal prices, allowing the company to operate its units at optimal levels. The company also generated cash of £20.8 million during the period and ended FY24 with a net cash position of £3.6 million, including restricted cash of £10.1 million, held as collateral in the form of deposits and mutual fund holdings.
Adjusted EBITDA for FY24 came in at £16.7 million, a slight increase from the £16.5 million reported in FY23. However, the previous year’s EBITDA included profits from opportunistic coal sales and an insurance settlement. When excluding the effects of these one-off items, OPG’s EBITDA grew by 57% in FY24, reflecting the strength of the company's core operations.
Statutory profit before tax stood at £7.5 million in FY24, compared to £10.4 million in the prior year. The FY23 figure benefited from the aforementioned coal sales and insurance claim settlement, as well as an impairment reversal of £2.95 million and a share of net profit from associates totaling £1.36 million. Despite this, the underlying profitability of OPG’s power generation operations remained robust.
The company's net asset value (NAV) per share stood at 42.3 pence, representing the carrying value of its key Chennai asset. OPG’s board emphasized that the replacement cost for similar assets in the same location would be considerably higher than their current carrying value, underscoring the strength of the company’s balance sheet.
A key highlight for OPG in FY24 was the stabilization of coal prices, which allowed the company to maintain strong operational performance. The group’s prudent cash flow management and reduced leverage have significantly strengthened its balance sheet and liquidity position, providing OPG with the financial flexibility to pursue new growth opportunities in the energy transition sector. As one of the least leveraged power generation companies in India, OPG is well-positioned to capitalize on emerging opportunities in the country’s evolving power sector.
India is poised to become the world’s third-largest economy in the coming years, with its rapid economic growth and expanding population driving a significant rise in energy demand. Although India currently ranks third globally in total power consumption, its per capita energy usage remains relatively low, indicating substantial growth potential. The industrial and retail sectors are expected to see a rise in energy demand, driven by factors such as increasing temperatures, improved living standards, and higher purchasing power. Government initiatives aimed at improving the financial health of state utilities have further enhanced the investment climate for power generation and transmission projects in the country.
