OREANDA-NEWS. November 9, 2011. The Board of JSW Energy Ltd at its meeting held today at Mumbai approved the

Results for the quarter ended and half year ended September 30, 2011.

Key highlights:

•           Unit 3 of 135 MW at Barmer achieved COD on November 7, 2011.

•           1200 MW power project at Ratnagiri fully implemented with the COD of 4th unit of 300 MW.

•           Lignite mines at Kapurdi in Barmer, Rajasthan commenced operations

•           Rajasthan Electricity Regulatory Commission (RERC) grants ad hoc interim tariff order for Unit 1 to Unit 4; Unit 1 to 3 commenced generation while Unit 4 is being commissioned.

•           Net generation 5016 million units in H1, FY 2012 (3608 million units in H1, FY 2011).

•           Total Income at  2269 crores in H1, FY 2012 1,779 crores in H1, FY 2011).

•           Entire debt of  410 crores for transmission project refinanced with effective savings of 2.26% in interest rate.

Operational Performance

The performance for the quarter was severely dented primarily due to

(i) The on-set of an early and prolonged monsoon resulting in - deferment of

power procurement by distribution companies; frequent backdown of the

load despite firm orders; loss of operational efficiencies.

(ii)        Non-availability of tariff for Barmer plant leading to idling of units and

(iii)        Steep depreciation in the foreign currency exchange rate in the last quarter.

The Plant Load Factor (PLF) achieved during Q2, FY 2011-12 was as under:

•           Viiayanaqar:-

The units have achieved average PLF of 72% as against 91% in the corresponding quarter of previous year. The PLF was lower mainly due to restrictions imposed on scheduling of power, deferment of power procurement by distribution companies and unscheduled plant maintenance.

•           Ratnaqiri:-

The units operated at an average PLF of 74%, against an average PLF of 62% in the corresponding quarter of previous year. The operations were affected due to the heavy monsoon resulting in lower efficiencies in operations besides frequent back-down of units by the State Load Despatch Centre (SLDC). The heavy monsoons impacted the timely commissioning of the 4th unit and also lead to delays in commissioning of the Jaigad-Karad transmission line.

•           Barmer:-

The units continued to remain shut down during the quarter ended September 30, 2011 pending tariff approval by RERC. RERC has since provided an adhoc interim tariff for Unit 1 to Unit 4; consequently 2 units of 135 MW each have commenced operations from October 12, 2011 while Unit 3 achieved COD on November 7, 2011, the commissioning activities for Unit 4 have been taken up. The units are being operated using the lignite being supplied by BLMCL from the Kapurdi mines.

In order to ensure effective plant utilisation, Company had entered into banking arrangement for 286 million units and the banked power will be available for sale during the period November 2011 to March 2012 in tranches.

During the quarter, company has entered into a Conversion Agreement with JSW Steel Ltd. for conversion of gas provided by them into power on conversion basis.

The Company achieved short term sales of 1658 million units during the quarter ended September 30, 2011 as against 1141 million units sold in the corresponding quarter of the previous year. The company sold 420 million units under long term PPA besides generating 229 million units on conversion basis and 286 million units on Banking Energy as against 640 million units sold under long term PPA during the corresponding quarter of the previous year.

The net generation from the different units were as under:

(Figures in million units)

 

Q2, FY 11-12

Q2 FY 2010-11

Vijayanagar

1262

1595

Ratnagiri

1331

123

Barmer

0

63

Total

2593

1781

Fuel

During the current quarter, the prices of imported coal continued to remain firm despite, having risen by approximately 34% between Q2, FY '11 and Q2, FY '12 on API 4 index, even while a lot of commodity prices have witnessed significant

downward correction due to the global slowdown. The fuel cost for the quarter was  762 crores, an increase of 65% over the corresponding quarter of previous year due to increased volume of generation as also the increase in prices of imported coal. The efforts of the company to increase reliance on consumption of Indonesian coal were impacted due to the heavy monsoon resulting in the operations relying on higher grade coal for sustained operations. However, with the monsoon having receded, the Company is relying on higher proportion of low grade coal to meet its fuel requirements. Also, efforts are being undertaken to identify new sources for coal procurement besides tie-up of requirement for tenors extending upto 12 months.

South African Coal Mining Holding (Ptv) Ltd (SACMH):

The Company (through its wholly owned overseas step down subsidiary) had acquired 49.8% stake in Royal Bafokeng Capital (Proprietary) Ltd. (RBC) who hold 54.06% in SACMH. The Company also holds directly (through its wholly owned step down subsidiary) 34.79% in SACMH as on September 30, 2011 resulting in an overall stake (directly and indirectly through RBC) of 61.71% in SACMH. Further, the Company (through its wholly owned overseas step down subsidiary) has acquired:

i)          Balance 50.20% stake in RBC, upon exercise of the put option by Royal Bafokeng Ventures Proprietary Ltd.

ii)         Entire share capital of Mainsail Trading 55 Proprietary Limited ("Mainsail") and including all amounts owing by the company to Mainsail upon exercise of the put option from RBH Resources Holdings Proprietary Ltd., a subsidiary of Royal Bafokeng Holdings Ltd.

Pursuant to the acquisition, the effective shareholding of the Company in SACMH presently stands at 93.27%.

During the quarter, SACMH has mined 224,075 tons of raw coal from the existing block and sold 119,264 tonnes at an average realisation of USD 111 per tonne. The margin continued to remain under pressure due to higher stripping ratio on account of development of new pits besides transportation bottlenecks resulting in higher logistics cost.

Financial Performance (Consolidated)

During the quarter, the Company achieved a Total Income of  996 crores, an increase of 18% over the total income for the corresponding quarter of previous year, EBITDA of  181.02 crores, decline by 52 % over the corresponding quarter in the previous year due to contraction in margins resulting from lower tariff realisation and increased fuel cost. The Company has incurred a Loss after tax during the current quarter of  109 crores, primarily due to translation losses on foreign exchange monetary items and increased interest & depreciation charge upon commissioning of additional capacities.

The Company has considered the unrealised loss of  79 crores on the restatement of foreign currency monetary items at the close of the quarter as an exceptional item, due to the unusual and steep depreciation in the value of the Indian Rupee against US Dollar over the last quarter.

During the quarter, the debt of Jaigad Power TransCo Ltd. of  410 crores was refinanced resulting in reduction in effective interest rate by 2.26%.

During the half year ended September 30, 2011, the company achieved Total Income of  2269 crores, EBITDA of  596 crores and Profit after Tax of

? 27 crores.

The consolidated net worth and consolidated debt as at September 30, 2011 was  5,672 crores and  9,809 crores respectively resulting in a consolidated debt equity ratio of 1.73 times.