Orient green breaks 3-yr streak of losses with Rs 829 crore pat in Q2

NEW DELHI: Wind and biomass energy major Orient Green Power (OGPL) has broken its three-year run of losses by posting a profit after tax (PAT) of Rs 829 crore in the second quarter.

The Shriram Group-promoted company incurred a net loss of Rs 227 crore in the corresponding quarter a year ago, while consolidated losses for 2015-16 had been Rs 340.3 crore.

Though it had begun recovering in the first quarter of 2016-17, it was still in the red by Rs 22.70 crore. Revenue rose to Rs 1,738 crore in the second quarter of 2016-17 — an 11.1 per cent increase from the corresponding quarter the previous year — while Ebitda was up by 19.6 per cent. Half-yearly results of 2016-17 showed a total revenue of Rs 3,001 crore, 13.4 per cent higher than the corresponding period of the previous year, while operational Ebitda has increased by 29.1 per cent.

"This is the highest quarterly and half-yearly profit in company history," said S Venkatachalam, managing director, OGPL. "We are extremely pleased with our performance." OGPL has an installed capacity of 536 MW, which includes wind assets of 430 MW and the rest in biomass.

More than three fourths of its 45 wind projects are in Tamil Nadu and the rest in Andhra Pradesh. It will add another 47 MW to its existing 50.54-MW wind farm at Tadipatri, Andhra Pradesh, by the end of the financial year. Its 106 MW of biogas projects are located in Tamil Nadu, Maharashtra, Telangana, Rajasthan and Madhya Pradesh.

Backdown is the arbitrary shutting-off of power intake by a discom for fear of overloading the grid. It has been a perennial problem for wind energy producers in Tamil Nadu for the last few years, with their association even petitioning the state electricity regulatory commission and the Supreme Court.

OGPL has lost around Rs 250 crore over the years due to backdowns, according to company sources.

With biomass power tariffs varying widely between states, making the business unviable in some places, OGPL has decided to sell the loss-making projects. “Our efforts to revive the biomass business by focusing on profit-generating assets while monetising the unviable ones continue to shape up well,” said Venkatachalam.

OGPL’s 106 MW biogas projects are spread across Tamil Nadu, Maharashtra, Telangana, Rajasthan and Madhya Pradesh.

Backdowns have been a crippling problem for wind energy producers in Tamil Nadu for the last few years, with their association petitioning the state electricity regulator and the Supreme Court demanding a ‘must run’ status for wind energy.

Backdowns in Tamil Nadu amounted to 20% of wind energy in 2013-14, 19% the following year and 23% in 2015-16. In the current fiscal year so far, backdowns have been down to 10-11%.