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Azure Power Announces Results for Fiscal Fourth Quarter 2018

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Fourth Quarter 2018 Period Ended March 31, 2018 Operating Highlights:

  • Operating Megawatts were 911 MW, as of March 31, 2018, an increase of 40% over March 31, 2017.
  • Operating & Committed Megawatts were 1,871 MW, as of March 31, 2018, an increase of 75% over March 31, 2017.
  • Revenue for the quarter was INR 2,259.0 million, an increase of 71% over the quarter ended March 31, 2017.
  • Adjusted EBITDA for the quarter was INR 1,625.5 million, an increase of 67% over the quarter ended March 31, 2017.

Key Operating Metrics

Electricity generation during the fiscal year ended March 31, 2018 increased by 618 million kWh, or 100%, to 1,236 million kWh, compared to the same period in 2017. The increase in electricity generation was principally a result of additional capacity operating during the period.

Total revenue during the fiscal year ended March 31, 2018 was INR 7,700.6 million, up 84% from INR 4,183.0 million during the same period in 2017. The increase in revenue was primarily driven by the commissioning of new projects.

Project cost per megawatt operating consists of costs incurred for one megawatt of new solar power plant capacity during the reporting period. The project cost per megawatt operating for the fiscal year ended March 31, 2018 increased by INR 1.7 million to INR 51.0 million, as compared to the same period in 2017. The project cost per megawatt was marginally higher due to the use of higher-cost domestic modules as required by Power Purchase Agreements "PPA” and use of purchased land compared to lower-cost open source modules and leased land in the corresponding previous period.

As of March 31, 2018, our operating and committed megawatts increased by 802 MW to 1,871 MW compared to March 31, 2017 as a result of winning new projects.

Nominal Contracted Payments

The Company’s PPAs create long-term recurring customer payments. Nominal contracted payments equal the sum of the estimated payments that the customer is likely to make, subject to discounts or rebates, over the remaining term of the PPAs. When calculating nominal contracted payments, the Company includes those PPAs for projects that are operating or committed.

The following table sets forth, with respect to our PPAs, the aggregate nominal contracted payments and total estimated energy output as of the reporting dates. These nominal contracted payments have not been discounted to arrive at the present value.

As of March 31,
2017 2018
INR INR US$
Nominal contracted payments (in thousands) 255,474,775 358,816,034 5,510,921
Total estimated energy output (kilowatt hours in millions) 44,677 82,884

Nominal contracted payments increased from March 31, 2017 to March 31, 2018 as a result of the Company entering into additional PPAs.

Portfolio Revenue Run-Rate

Portfolio revenue run-rate equals annualized payments from customers extrapolated based on the operating and committed capacity as of the reporting dates. In estimating the portfolio revenue run-rate, the Company multiplies the PPA contract price per kilowatt hour by the estimated annual energy output for all operating and committed solar projects as of the reporting date. The estimated annual energy output of the Company’s solar projects is calculated using power generation simulation software and validated by independent engineering firms. The main assumption used in the calculation is the project location, which enables the software to derive the estimated annual energy output from certain meteorological data, including the temperature and solar insolation based on the project location.

The following table sets forth, with respect to the Company’s PPAs, the aggregate portfolio revenue run-rate and estimated annual energy output as of the reporting dates. The portfolio revenue run-rate has not been discounted to arrive at the present value.

As of March 31,
2017 2018
INR INR US$
Portfolio revenue run-rate (in thousands) 11,005,761 15,764,719 242,124
Estimated annual energy output (kilowatt hours in millions) 1,921 3,557

Portfolio revenue run-rate increased by INR 4,759.0 million to INR 15,764.7 million as of March 31, 2018, as compared to March 31, 2017, due to an increase in operational and committed capacity.

Fourth Quarter 2018 Period ended March 31, 2018 Consolidated Financial Results:

Operating Revenue

Operating revenue in the quarter ended March 31, 2018 was INR 2,259.0 million, an increase of 71% from INR 1,317.6 million over the same period in 2017. The increase in revenue was driven by the commissioning of new projects.

Cost of Operations

Cost of operations in the quarter ended March 31, 2018 increased by 65% to INR 215.4 million from INR 130.7 million in the same period in 2017. The increase was primarily due to plant maintenance cost for newly commissioned projects which was partially offset by the implementation of improved O&M methods which improved plant productivity.

General and Administrative Expenses

General and administrative expenses for the quarter ended March 31, 2018 increased by INR 205.7 million, to INR 418.2 million compared to the same period in 2017. The increase was primarily due to increase in personnel costs to support the Company’s growth and higher professional charges compared to previous comparable quarter.

Depreciation and Amortization Expenses

Depreciation and amortization expenses during the quarter ended March 31, 2018 increased by INR 210.8 million, or 67%, to INR 524.8 million compared to the same period in 2017. The principal reason for the increase was capitalization of new projects during the period from December 31, 2016 to March 31, 2018.

Interest Expense, Net

Net interest expense during the quarter ended March 31, 2018 increased by INR 202.6 million, or 32%, to INR 833.7 million compared to the same period in 2017. Interest expense increased on account of borrowings for new projects and was partially offset by the increased interest income on investments during the quarter ended March 31, 2018. This includes one-time reclassification from interest expense to Income tax expense of INR 136.2 million, due to issuance of Green bonds.

Gain / Loss on Foreign Currency Exchange

The Indian rupee appreciated against the U.S. dollar by INR 3.1 to US$ 1.00 during the period from December 31, 2016 to March 31, 2017, while the Indian rupee depreciated against the U.S. dollar by INR 1.3 to US$ 1.00 during the period from December 31, 2017 to March 31, 2018. This depreciation during the period from December 31, 2017 to March 31, 2018 resulted in a foreign exchange loss of INR 98.3 million, compared to a gain of INR 309.2 million during the same period in 2017.

Income Tax Expense / Benefit

The income tax expense decreased during the quarter ended March 31, 2018 by INR 624.0 million to INR 21.1 million, compared to income tax expense of INR 645.2 million in the same period in 2017. During the current quarter, we recorded a non-cash deferred tax income amounting to INR 115.1 million, was primarily on account of new projects commissioned during the quarter and there was cash outflow of INR 136.2 million related to current income taxes.

Net income/ loss

The net income for the quarter ended March 31, 2018 was INR 147.6 million, as compared to a net loss of INR 306.7 million for the quarter ended March 31, 2017, an increase in net income by INR 454.3 million as compared to the same period in 2017. This was primarily due to an increase in revenue and economics of scale during the quarter ended March 31, 2018, compared to March 31, 2017.

Cash Flow and Working Capital

Cash generated from operating activities for the fiscal year ended March 31, 2018 of INR 1,839.1 million, INR 1,866.3 million higher than the prior comparable period, primarily due to an increase in revenue during the current period.

Cash used in investing activities, for the fiscal year ended March 31, 2018 was INR 15,772.2 million, compared to INR 21,944.3 million for the prior comparable period. The cash used in investing activities was lower due to realisation of cash from maturities of available for sale investment and restricted term deposits and used in purchase of property, plant and equipment. The purchases of property plant and equipment for new projects as compared to the prior comparable period, was higher by INR 4,207.9 million.

Cash generated from financing activities was INR 16,816.1 for the fiscal year ended March 31, 2018, compared to INR 24,331.5 million for the prior comparable period. During the fiscal year ended March 31, 2018, the Company raised INR 43,807.3 million of non-convertible debentures and project debt, including green bonds.

Liquidity Position

As of March 31, 2018, the Company had INR 9,730.1 million of cash, cash equivalents and current investments. The Company had undrawn project debt commitments of INR 3,398.6 million  as of March 31, 2018.

Adjusted EBITDA

Adjusted EBITDA was INR 1,625.5 million for the fiscal fourth quarter period ended 2018, compared to INR 974.4 million in the fourth quarter ended March 31, 2017. The increase was primarily due to the increase in revenue and economics of scale during the period.

Guidance for Fiscal Year 2019

The Company continues to expect to have 1,300 – 1,400 MWs operational by March 31, 2019 and revenues of between US$ 143 – 151 million for fiscal year ending March 31, 2019.

Exchange Rate

This press release contains translations of certain Indian rupee amounts into U.S. dollars at specified rates solely for the convenience of the reader. Unless otherwise stated, the translation of Indian rupees into U.S. dollars has been made at INR 65.11 to US$ 1.00, which is the noon buying rate in New York City for cable transfer in non-U.S. currencies as certified for customs purposes by the Federal Reserve Bank of New York on March 30, 2018. The Company makes no representation that the Indian rupee or U.S. dollar amounts referred to in this press release could have been converted into U.S. dollars or Indian rupees, as the case may be, at any particular rate or at all.

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