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Feb 15, 2013, 04.27 PM IST | Source: Moneycontrol.com

Suzlon Energy sinks as losses rise four-fold in Q3

Suzlon Energy shares plunged over 12 percent on Friday morning as the street slammed the wind turbine maker's third quarter results. Losses in Oct-Dec rose four-fold to Rs 1,155 crore, while total income slipped 20 percent to Rs 4,048 crore.

Moneycontrol Bureau

Suzlon Energy shares plunged over 12 percent on Friday morning as the street slammed the wind turbine maker's third quarter results. Losses in Oct-Dec rose four-fold to Rs 1,155 crore, while total income slipped 20 percent to Rs 4,048 crore.

The losses were significantly higher than analysts' expectation of net loss of Rs 307 crore on revenue of Rs 5,577 crore for the three-month period, according to a CNBC-TV18 poll.

"Over FY13 we have faced a textbook conflict in allocation of resources between our business and our liabilities. While we have made tremendous progress on the liability management front, our business performance has been adversely hit due to our abnormal operating environment, leading to a significant loss for the quarter," said Kirti Vagadia, CFO.

Its finance costs increased to Rs 457 crore from Rs 441 crore and it also had one-time re-finance cost of Rs 82 crore in the quarter.

Suzlon, once riding high on strong order book, especially from Europe and North America, has been under pressure over the last couple of years, as it struggles to repay its huge debts and service its bond holders.

The Pune-based firm got a respite last month, when a consortium of banks approved its debt restructuring package of Rs 9,500 crore.

The company has an order book worth Rs 41,546 crore as of Feb 14. Its German REpower subsidiary signed its largest on-shore contract of 359mw on Jan 31. While Vagadia feels that the long term fundamentals of the business remain strong, there could be some pressure in the near-term.

"Lower order intake during 2012, due to policy deterioration in some parts of Europe, such as Spain and Italy, and uncertainty around the PTC in the US, is expected to result in temporary dip in installation in 2013, followed by a sustained recovery through 2016," he said.

Chairman Tulsi Tanti too said that "near-term challenges will continue to impact the industry over 2013."

The off-shore wind market in Europe grew 35 percent year-on-year between 2011-2012, and is expected to grow at 31 percent over the next few years to 2016.

At 10:10 hrs, Suzlon shares were down 9.7 percent at Rs 21.45 on NSE. As of Thursday's close, the stock had gained 31 percent since the CDR package was approved on Jan 24. 

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Nachiket Kelkar
nachiket.kelkar@network18online.com

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