Suzlon hits new low after big quarterly loss

Moneycontrol Bureau

Suzlon Energy shares slumped near 5 percent to a new low of Rs 12.35 on NSE on Friday after the wind turbine maker reported a big quarterly loss of Rs 1,913 crore in the fourth quarter, as sales fell and interest payments on its huge debt remained high. The company said its guidance remains suspended amid the global uncertainties.

Its consolidated revenue for the quarter was down 36 percent year-on-year to Rs 4,336 crore.

"This has been an extremely difficult year for the Suzlon Group. We faced both significant internal challenges on the liability management front, and externally with a highly competitive global wind sector, and turbulent India market, which shrank by almost 50 percent," Tulsi Tanti, Chairman said.

Execution delays led cancellations of orders in Q4 of about 195 mw, including an order by Coromandel Wind Energy for 75.6 mw and Brazil's Servtec for 24 mw, the company said.

Suzlon has an consolidated order book of 5.9gw, or about Rs 42,094 crore.

The company has cut down its operating fixed costs by 20 percent, decreased headcount by 2,000 employees, reduced working capital to 20 percent at Group-Level, the company said, adding that further optimization is under way.

The company managed to strike a debt restructuring deal with its lenders in FY13, but interest costs remain high. Its finance costs last quarter were up 15 percent to Rs 487 crore

As of March 31, on a consolidated basis, Pune-based Suzlon had Rs 10,858 crore in long-term borrowings. Its current liabilities as of March 31 were at Rs 16,251 crore, which included short-term borrowings, trade payables other current liabilities and short term provisions.

It also said that it continued "active solution-oriented" dialogue with foreign currency bond holders.  The company had issued FCCBs to raise funds to buy Germany's REpower Systems SE.

In FY14, Suzlon said it will focus on transitioning to a more asset-light/debt-light  model and it plans to raise USD 400 million over the year by selling non-critical assets.

The company will continue to reduce operational expenses, optimize manufacturing and further right size, which means there will be more job cuts.

At 10:10hrs, Suzlon was at Rs 12.40, down 5 percent on NSE.