Suzlon Energy posts record quarterly loss
India’s leading wind turbine maker reported its biggest ever quarterly loss at US$153 million.
Sales rose a slim 9% to US$857 million, not enough to offset Suzlon’s weaker wind turbine sales in the second quarter amid rising interest costs and a wildly fluctuating Rupee.
"The first quarter has been difficult,” said CFO Kirti Vagadia. “Our profitability has been hurt due to low volumes, higher sales in low margin markets, higher interest cost and a foreign exchange loss of US$27.5 million.”
Vagadia said Suzlon is in the process of enhancing its working capital facilities to execute its order pipeline and achieve its targeted 30% growth in 2012.
Suzlon has, however, maintained its full year revenue guidance of US$5 billion despite the grim results.
Chairman Tulsi Tanti said Suzlon’s core business fundamentals remain sound. Because of its high gross margins, strong and firm order book and high turbine availability, the company “. . . is embarking on a robust programme, project transformation, to reduce annual operating expenditures and manpower costs by 20% by the end of the year.”
Suzlon said it had new orders of 456MW and framework agreements of 200MW signed in the first quarter of 2012-13.
The Indian wind energy industry is expected to add another 15,000 MW in the next five years. It has grown strongly in the past few years due to government generation-based incentives and accelerated depreciation.
The government, however, removed some of the incentives earlier this year, sapping growth and worsening the situation of Suzlon and other wind turbine makers that are struggling due to a slowdown in their foreign markets.