OPG Power Ventures PLC said revenue and profit both fell in its latest financial year thanks to ‘lower generation’, but said its cash flows remain ‘robust’ for the future.
Despite the drop in earnings, OPG Power shares soared up 15% to 12.56 pence each on Monday morning in London.
The Isle of Man-based developer and operator of power plants in India said that during the year that ended on March 31, pretax profit fell by 20% to £10.4 million from £13.0 million the year before.
OPG said revenue meanwhile dropped 27% to £58.7 million from £80.1 million, although it noted that this was ‘despite the challenges presented by volatile commodity markets and supply chain realignments.’
The company added that this decline was mainly due to to lower generation caused by the high price of coal as well as its focus on profitable contracts. Total generation decreased to 1.5 billion kilowatt hours from 1.9 billion.
‘We are delighted that in FY23, OPG Power has achieved robust financial results despite volatile markets and high coal prices,’ commented Non-Executive Chair Narayanan Kumar. ‘This outcome serves as a testament to the agility and resilience of our business model to adapt to macroeconomic turbulence.’
OPG declared no dividend for financial 2023, unchanged from the prior year. It said it will reconsider its dividend policy at some point, but that ongoing disruptions and uncertainty mean that focusing on cash conservation is in its best interests.
‘The cash thus accumulated will be used to maintain a strong and resilient balance sheet to withstand turbulent times,’ explained Chief Financial Officer Ajit Pratap Singh.
OPG’s cash balance stood at £3.3 million at March 31, down from £7.7 million at the same time one year prior. The company also decreased its gross debt to £32.6 million from £43.3 million.
OPG anticipates ‘substantial opportunities’ over the next few years, and said its ‘medium and long-term fundamentals remain steadfast, supported by robust cash flows’. Additionally, it expects the the power sector in India undergo a ‘profound transformation’ throughout the 2020s.
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