According to reports, wind turbine maker Suzlon Energy Ltd’s fourth-quarter net loss widened to Rs.1,912.72 crore from Rs.300.24 crore for the corresponding quarter of the previous year due to non-routine costs and the slowing economy.
Suzlon net loss widens to Rs 19.13 billion in March quarter
Total income fell 36.37% to Rs.4,336.44 crore from Rs.6,815.15 crore.
For the full year, Suzlon reported a net loss of Rs.4,723.96 crore against a net loss of Rs.478.58 crore in the year ago.
Annual earnings were impacted by non-routine costs, including foreign exchange losses, asset impairments and tax credit reversals totalling approximately Rs.1,100 crore, the company said in a statement.
“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%,” said chairman Tulsi Tanti.
“Breaking out of this cycle required a strategic shift on our part in order to preserve value and ensure the sustainability of our business in the long term. This meant that, over the fiscal, the business was under-resourced, which contributed to what is a very poor result,” he said.
These were needed to address liabilities and improve efficiency, he said. “Despite these challenges, we secured new orders of nearly $ 4.3 billion over the year, REpower continued to outperform the sector, and we enter the new fiscal focusing 100% on execution,” Tanti said. REpower Systems SE is a unit of the Suzlon Group.
On 24 January, Suzlon won approval for a Rs.9,500 crore debt recast from domestic lenders. The lenders, a consortium of 19 banks, agreed to enhance working capital facilities to the group by Rs.1,800 crore and a 10-year back-ended repayment plan as part of the exercise.
“As we have stated in the past, financial year 2013 presented us with a textbook conflict in allocation of resources, between our business needs and those of our liabilities,” said Kirti Vagadia, group head of finance.
“While we made significant progress, under ‘project transformation’, in streamlining the organization over the year—reducing headcount at Suzlon by nearly 2,000 positions, improving business efficiency, and in liability management—the impact of this has been a very low volume of execution, along with the resultant non-routine costs,” Vagadia said.
Delays in execution have led to the cancellation of a few orders, totalling 195 megawatts, he said. The order book is net positive thanks to new orders, he said, adding that the business is starting to stabilize.
“We embark into FY14 (fiscal 2014) with additional working capital support, a leaner workforce, lower fixed costs, and a more efficient cash cycle. While the market environment continues to remain extremely challenging, we are positioning the business to take advantage of the market recovery, which is independently projected for calendar year 2014,” he said.
In a related development, the board of directors approved an omnibus resolution for issuance of equity or other equity-linked instruments to the extent of Rs.5,000 crore, subject to the approval of shareholders. This is an enabling resolution that allows the company to raise funds if needed.