Suzlon loss up four times to Rs 1,156 cr

Shuts rotor blade, control panel manufacturing units at Puducherry

Liquidity constraints affected Suzlon Energy's third quarter performance as it posted a consolidated net loss of Rs 1,154.5 crore. Net loss of the wind turbine maker widened four times over from the same quarter last year, which was at Rs 286 crore.

Adverse financial conditions of this company under corporate debt restructuring (CDR), also led to closing down of rotor blade and control panel manufacturing units at Puducherry. Its Nacelle unit however will continue to function.  

Unit closure is also a part of its endeavour to reduce operating expenditure and working capital, and rationalise its supply chain. “The decision follows the challenges faced in industrial relations at the manufacturing facility coupled with logistical issues faced by the facility in handling multi-megawatt wind turbine components of increasing size,” Suzlon said. As a part of its CDR, it has been trying to reduce manpower costs as well.    

The company's revenues decreased by 19.5% to Rs 4,074 crore compared to Rs 5,063 crore. Kirti Vagadia, the chief financial officer of the company said that Suzlon faced a textbook conflict in allocation of resources between their business and liabilities.

“While we have made tremendous progress on the liability management front, our business performance has been adversely hit due to our abnormal operating environment, leading to a significant loss for the quarter,” said Vagadia.

Vagadia assures that the long-term fundamentals of its business continue to remain strong. “Our fleet of over 21,000 megawatt worldwide continues to deliver industry beating uptime levels; our order inflows remains strong – with a significant uptick after the approval of our CDR package; as well as strong growth momentum in certain key markets, and particularly at the REpower level,” he said. The company's total orderbook stands at Rs 41,546 crore.

Going ahead, the company believes that the current year will see temporary dip in wind turbine installations. This is due to lower order intake in 2012, policy deterioration in some parts of Europe such as Spain and Italy, among others.

“Looking back, 2012 was a challenging year for the wind energy sector at large; macro-economic conditions and policy challenges affected markets worldwide. While we anticipate that near-term challenges will continue to impact the industry over 2013, there are some green-shoots across global markets,” said Tulsi Tanti, chairman of Suzlon group.