There is a lovely phrase in English: "Steady as she goes". It defines a statewhere things are continuing to do well. Where business is humming along. Where there areno upheavals no rolls and pitches no downturns nor ugly surprises. Where all the cogs inthe wheel are performing exactly as these should a tad better than these didyesterday. When as another English phrase goes "Things are ticking alongswimmingly".
Nothing better describes your Company's performance for 2015-16. Here are the keyfinancial results of CESC as a standalone entity.
Revenue from operations increased by 5% over the previous year to RS. 6493crore.
Total income (including other income) also grew by 5% to RS. 6616 crore.
Earnings before interest depreciation and taxes (EBIDTA) rose by 5% to RS.1721 crore.
Earnings before interest and taxation (EBIT) grew by 5% to RS. 1352 crore.
Profit before taxes (PBT) increased by 2% to RS. 899 crore.
Profit after taxes (PAT) was 1% higher at RS. 707 crore.
Behind this solid and stable performance runs many a story of key operationalimprovements. Let me share a few with you relating to power supply and customer servicethe details of which are elaborated in the Directors' Report and the chapter on ManagementDiscussion and Analysis.
Budge Budge Southern and Titagarh the three power generating stations directly underthe ownership of your Company achieved a composite plant load factor (PLF) of almost 71%in 2015-16. This was clearly superior to the national average of 62%.
It needs to be said that thanks to significantly greater electric supply in the firstsix months of operation of the 2x300 MW coal fired thermal power plants at Haldia in WestBengal set up by Haldia Energy Limited a 100% subsidiary your Company had theluxury of reducing the PLF of the older Southern and Titagarh units and yet meet theneeds of more than 3 million customers in Kolkata and Howrah spread over an area of 567square kilometres.
To increase its ability to service steadily growing electricity demand in an acutelycongested city like Kolkata your Company has started to use technologies that would havebeen unheard of even a few years ago. It has built India's first underground extra highvoltage substation where the gas insulated switchgears are under the surface while thepower transformers at the ground level. It has also installed India's first unit-cooled100 MVA power transformer which takes up 35% less space than a conventional transformerthus allowing for significantly larger capacities in limited spaces.
Your Company added some 1.4 lakh customers during 2015-16. The average time to providea new connection continues to come down and is now between one to two days. For premiseshaving an existing connection the time taken is a day. In 2015-16 over 38% of theconnection applications were received online versus 17% a year earlier. New onlineservices launched in 2015-16 include among others a refund tracker and a payment modulefor meter replacements. Today consumers who have registered their mobile phone numbers ore-mail IDs get access to a complete set of information and services through SMS e-mailand CESC's mobile app.
Let me now touch upon the power generation business of two of your Company'ssubsidiaries. The 2x300 MW coal fired thermal power project at Chandrapur in Maharashtrais fully operational. Unit I went into commercial operation in February 2014 and Unit IIin August 2014. To evacuate power the former is connected to the Maharashtra state gridwhile the latter is to the central grid an arrangement that gives Chandrapurflexibility in selling power both within and outside the state.
As mentioned earlier both 300 MW plants at Haldia started commercial operations fromthe end of last year. The units already exhibit an 85% plant availability factor and havebeen critical in steadily supplying cost efficient powerto Kolkata and Howrah.
There have been three wind power projects. Two of them are in Gujarat and Rajasthan andthe third in Madhya Pradesh.
Now for a few words on your Company's other 'non-power' ventures. With 118 storesacross India including 36 hypermarkets Spencer's Retail is CESC's flagship subsidiary inthe retail business. In 2015-16 it registered a same store sales growth of over 8.4% andis expected to achieve operating breakeven in 2016-17.
With almost 24000 employees across 47 service facilities Firstsource SolutionsLimited (FSL) provide business process management services to a wide list of marqueecustomers from the Fortune 500 and FTSE 100 companies in the healthcare telecom mediabanking financial services and insurance industries. FSL has continued to perform well.You may recollect that Quest Properties India Limited (QPIL) a wholly owned subsidiary ofyour Company launched Kolkata's first upscale shopping mall the Quest in November 2013.An iconic shopping centre it has been a huge success with an annual footfall of 12million and combined retail sale of some RS. 520 crore.
And Au Bon Pain Cafe India Limited now has 24 cafes in Bengaluru Kolkata and Delhiand is readying for its next round of growth.
I am optimistic about India's growth prospects. Having succeeded in clocking real GDPgrowth of 7.6% in 2015-16 by far the highest among all developed countries andmajor emerging markets I believe that the stage is set for higher growth. Therehave been reforms in the power sector and investments have gradually begun to kick in. Iexpect more in 2016-17 and beyond. Companies that have been careful with their cash andkept the gearing under control are ideally placed to refocus on growth and on newprojects. I therefore expect your Company to perform even better next year and creategreater value for society as well as for you who are the ultimate owners of thiswonderful enterprise.
As always thank you for your support. Your employees management Board of Directorsand I treasure this very greatly.
With best wishes
| ||Sanjiv Goenka |
|19 May 2016 ||Chairman |