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Suzlon posts 77% drop in FY09 net profit, sees FY10 revenues flat

Suzlon posts 77% drop in FY09 net profit, sees FY10 revenues flat
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First Published: Sun, Jun 28 2009. 04 55 PM IST
Updated: Sun, Jun 28 2009. 04 55 PM IST
Mumbai: The country’s largest wind turbine maker, Suzlon Energy, on Sunday reported a 77% decline in its net profit at Rs236.48 crore in fiscal year 2009 on the back of currency losses and replacement of defective blades.
The company’s net profit (after share in associates profit and minority interest) was Rs1,030.10 crore in fiscal year 2008.
Revenues took a hit last year after some clients in the US canceled orders and the company undertook replacement of defective blades.
“The blade retrofit programme is 80% complete. We are slightly behind schedule but expect it to be completed by August. We don’t expect any more provisioning for the retrofit programme,” Suzlon Energy chief operating officer Sumant Sinha told reporters here.
In the January-March quarter this year, the company had set aside Rs100 crore for the blade replacement programme, Sinha said.
“Despite a challenging year, we have registered good growth at a consolidated level with sales growing to Rs26,082 crore. There is an industry-wide slowdown in the immediate term, but I expect we will achieve 30% growth levels in 2011-12,” he said.
The consolidated revenues expanded 91% at Rs26,082 crore in FY09 as against Rs13,679 crore in the previous fiscal.
The Pune-based company has an order book position of Rs 7,901-crore as of 25 June.
“On a consolidated basis, we expect revenues in FY10 to be flat because the financial market has still not recovered completely. Interest rates are still high but we expect margins to improve a bit,” Sinha said without giving an estimate.
The company recently undertook a liability management exercise for Foreign Currency Convertible Bonds (FCCB) of $500 million issued in 2007.
“Our total debt level on a consolidated basis was about Rs11,800 crore at the end of last fiscal,” he added.
The company has adopted stringent policies on debt management, working capital reduction, increasing operating efficiencies, freeze on capital expenditure and cost rationalization, he said.
“The working capital management reduction will release about Rs1,500 crore. We have almost no capex this year... there is a minimal amount just for maintenance,” Sinha said.
Suzlon Group has a total capital expenditure (capex) of Rs300 crore for FY10, which includes maintenance costs for Belgian subsidiary Hansen Transmissions and German arm, REpower Systems.
Sinha said despite poor sales in the US in the calendar year 2008, the market still provides hope.
“India constituted 20% of revenues in FY09. The US accounted for 40%, While India is an important market, what is happening in the rest of the world is quite critical to us,” Sinha said.
While the first-half of this fiscal presents a gloomy picture, he said adding it expects sales to go over 65% in the second-half of FY10.
Sinha said the company is considering selling some or all of its stake in Belgium-based Hansen Transmissions, in which it holds a 61.28% stake.
“We are in the early stages of considering the sale of some or all of our stake in Hansen. I cannot say more,” he added, while skirting a question on whether Spanish firm Gamesa is in talks with Suzlon for buying stake.
Suzlon, which currently holds close to 91% stake in Hamburg-based REpower Systems AG, “intends to move forward”, Sinha said.
“We are examining possible options either of signing a domination agreement or a squeeze-off, wherein we have to raise our stake to 95%,” he said.
Suzlon completed the acquisition of REpower on 6 June.
Compan’s chairman Tulsi Tanti and family sold 4% of Suzlon’s stake in May to raise money for buying 22% stake in REpower from Portugals Martifer SGPS SA.
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First Published: Sun, Jun 28 2009. 04 55 PM IST