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Suzlon posts net profit in Q3- Record order book of $7.3bn equal to about 5000MW of Wind capacity

Suzlon Energy, reported its latest quarter numbers on Friday last week. According to the company, Net sales fell 20.7% Rs. 4432.90 crore in Q3 December 2010 over Q3 December 2009.

The company reported a stand-alone net profit for the third-quarter ended December 31, 2010 of Rs.1.20 crore, compared with a net loss of Rs.285.14 crore in the corresponding quarter last year. Total revenue grew to Rs.1,292.24 crore from the Rs.810.50 crore for the same period last year.

On a consolidated basis, the company reported a net loss of Rs.253.57 crore, whereas it reported a net profit of Rs.14.10 crore in Q3FY10. Total revenue was Rs.4,528.25 crore. While it was Rs.5,625.90 crore in the year-ago quarter.  Net debt-to-equity ratio was 1.5 times.

Suzlon  announced an impressive cumulative 35% rise in orders  from October to a record $7.3 billion, equal to about 5,000 MW of power capacity on a consolidated basis.The Suzlon Wind orderbook stood at 2,578 megawatts (MW) (Rs 14,600 crore), with 1,624 MW (Rs 9300 crore) in domestic orders and 954 MW (Rs 5300 crore) in international orders as on 4 February 2011.

As readers of Panchabuta are aware, Suzlon Energy announced signing of order of $1.28bn for 1000MW with subsidiary of Caparo Energy-to be developed by 2013. Earlier Suzlon, announced that it had secured a  218 MW order in Brazil from Martifer Renováveis Geração de Energia e Participações.

 Suzlon Group REpower just concluded a 300MW first contract under a 954 MW framework agreement with Saint-Laurent Énergies. A couple of days ago they announced a joint venture with St. Louis based Affinity Wind to develop 150MW projects in Illinois.Just a couple of days before that Suzlon Group, the world’s third leading wind power company, announced a memorandum of understanding (MoU) with the Government of Gujarat to develop 1,000 megawatt (MW) of new wind power capacity in the state over the next three years a few days back.

A couple of weeks ago Suzlon had signed an agreement with Hindustan Zinc Limited, a Vedanta Group company and the world’s largest producer of zinc, to set up, operate and maintain 150 megawatt (MW) of wind power projects across the states of Karnataka, Maharashtra, Rajasthan and Tamil Nadu.

Mr. Tulsi R. Tanti, chairman and managing director, Suzlon Group, said the group’s performance is steadily improving. Emerging, offshore and key matured markets are showing sustained momentum. The company’s strategy to focus on these markets is delivering for good results, as evidenced by steady inflow of major orders over the past few months in India, Brazil, Canada and Belgium. He said Suzlon’s $7.3 billion orderbook is one of the best in the industry, and gives strong visibility for future growth.

Mr Tanti further added that while the business environment remains challenging, particularly in the US and parts of Europe, its competitive position remains strong with a global sales and service organization — spanning 32 countries and 15 GW operating wind capacity worldwide — which is delivering in excess of 97% availability.

Mr. Robin Banerjee, chief financial officer Suzlon Energy said the company has achieved a marked improvement in business performance over the past three quarters. There has been progress on all financial parameters and the firm has delivered steady gross profit margins. Its debt-to-equity ratio has been maintained and focus on bringing down fixed costs is delivering results.

However, notional forex losses has impacted Suzlon’s reported bottom line due to the significant volatility in the Euro-Rupee exchange rates. Mr Banerjee said the firm is very clearly headed in the right direction, substantially improving its quarterly normalized earnings before interest and taxes (EBIT) performance year on year.

As for the outlook, the company said the global market for wind energy is improving. There has been a steady increase in financing for new build wind projects, quarter on quarter. Additionally, there is significantly higher visibility of volumes emerging, with a global pipeline of 140 GW to 150 GW of wind installations over the next three years.

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