Suzlon Energy Ltd. Saturday posted a wider quarterly loss led by higher interest costs, provisioning for deferred international tax liability and foreign exchange losses, and trimmed its annual revenue forecast, citing lower orders executed during the quarter. Net loss for the October-December period stood at INR2.86 billion as compared to INR2.54 billion a year earlier, the company said in a statement. Revenue for the period rose 12% to INR49.85 billion.
Deteriorating market for wind turbines amid pressure on government finances, which has put subsidies for the sector at risk, and downward pressure on turbine prices due to extra supply is hurting wind turbine manufacturers globally.
Suzlon’s larger rival Vestas Wind Systems A/S (VWDRY, VWS.KO) earlier this month said its chairman and deputy chairman will step down in March as the world’s biggest maker of wind turbines swung to a larger-than-forecast net loss in 2011 and warned it may not be profitable in 2012.
The Indian wind turbine maker however reported its highest ever order backlog of 5,755 megawatt, citing strong demand from emerging markets.
Suzlon had to provide INR1.34 billion toward deferred tax liability for its overseas subsidiaries, which hurt profit for the quarter, Chief Financial Officer Robin Banerjee told Dow Jones Newswires.
The interest cost during the quarter rose 28% to INR3.22 billion from INR2.52 billion a year earlier, as India’s central bank has raised rates 13 times since March 2010. The earnings were also hit due to rupee depreciation.
Suzlon cut its revenue forecast for the financial year that ends March 31 to between INR210.0 billion to INR220.0 billion from INR240.0 billion to INR260 billion guided earlier.
“It is unfortunate that in spite of having our best-ever order book, we have had lower volumes in third quarter, leading to a downward revision of our full-year guidance,” Chairman Tulsi Tanti said in a statement. “These lower volumes were primarily due to an extended monsoon in India, grid infrastructure delays in China, and a procedural delay in closing our new working capital facilities.”
The company has raised INR11 billion for working capital, which will facilitate its planned deliveries in the fourth quarter and next financial year, Banerjee said.
Suzlon has been trying to book more orders to raise funds as some of its foreign currency convertible bonds mature this year. “We have adequate plans to mitigate and redeem the FCCBs,” Banerjee said