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| Blade retrofitting, forex losses hit Suzlon | |
| BS Reporter / Mumbai January 31, 2009, 0:45 IST | |
Damaged rotor blades and forex losses caused the world's fifth-largest wind turbine maker Suzlon Energy post a consolidated net loss of Rs 34.90 crore for the quarter ended December 2008 against a Rs 142.8 crore profit in the corresponding previous quarter.
However, consolidated revenues grew 117 per cent to Rs 6,893 crore for the quarter from Rs 3,169 crore in the corresponding previous quarter.
Suzlon was forced to spend Rs 233.14 crore during the quarter to rectify faulty blades in the US, besides incurring foreign exchange loss on zero coupon convertible bonds worth Rs 91.75 crore and a mark-to-market exchange loss of Rs 123.97 crore. Together, exceptional items worth Rs 448.85 crore pushed the company into the red.
Suzlon has also provided for an additional Rs 170.88 crore till March 2009 to cover additional costs arising from the blade retrofitting programme.
Cracks were detected in 170 of the 1,250 blades for 400 turbines of the S88 V2 model supplied by Suzlon in 2007 to two of its major clients in the US -- Edison International and John Deere.
"We did a full root cause analysis of the problem and are implementing a retrofit and replacement programme to strengthen all V2 blades. About 85 per cent of the programme will be completed by March and the rest by June, this year. The additional provision is enough to fund the entire project," said Chief Operating Officer Sumant Sinha.
Earlier, Suzlon had retrofitted blades for around five clients in the US, Portugal and Brazil, spending around Rs 120 crore. The company has abandoned sale of V2 blades and moved to V3 new generation blades in early 2008. About 342 units of the S88 V3 blade have been commissioned in Australia and the US, he said.
Currently, the Suzlon Energy Wind Group, which excludes subsidiaries Hansen and REpower, has an order book position of 1,916 MW of total capacity (including 1,818 mw international orders) worth Rs 10,387 crore. Suzlon had an order book position of Rs 17,016 crore for 3,357 MW in the third quarter of 2007-08 and orders worth Rs 15,131 crore as on October 29, 2008.
Suzlon expect orders for over 2,000 MW across the US, Europe, China and Australia, of which 1,000 MW is likely to come in the next six months. Revenue growth in the US market is likely to drop to 15 per cent in 2009-10, from the so far 30 per cent in this financial year. The European market will also remain stagnant due to the recession. Suzlon expects substantial growth in business from countries such as Australia, China, Brazil and South Africa to cover de-growth in the US and European markets, said Sumant.
The share prices of the company rose 5.94 per cent on the Bombay Stock Exchange (BSE) today to close at Rs 47.30, from its previous close of Rs 44.65.
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