Mumbai: Suzlon Energy Ltd, the world’s fifth-largest wind turbine maker, slipped to a loss in the December quarter on costs due to faulty turbine blades and foreign exchange losses, and said growth would pick up from 2010.
Demand was expected to moderate in 2009 after rapid growth in recent years, as recession in major economies and falling oil prices weigh, with Suzlon expecting revenue growth in the United States to halve in the fiscal year starting in April.
The company reported exceptional items of Rs449 crore ($91.4 million) for its fiscal third quarter, including Rs233 crore of costs related to blade failures in its wind turbines. It also made an additional provision of $35 million for the blade retrofit programme.
“These are one-off, one-time events which we will not have in this quarter. Our operating performance has improved substantially,” chief operating officer Sumant Sinha told reporters.
“From the operating standpoint the company continues to be healthy,” he said, adding that commodity prices, freight and logistics costs going down, profitability margin in the current quarter would be good.
“The coming year is going to be good.”
However, revenue growth in the US market was likely to slip to 15% in 2009-10, compared with 30% in this financial year, he said. In the current fiscal year to March, the company expected consolidated revenue growth of 50-70%.
“The recession impact has been mainly in the US. Europe is more robust we do not see much impact in the rest of the world. The industry is going to take a pause after growing at 30% over the last three years,” Sinha told reporters.
The company posted a consolidated net loss, including subsidiaries Hansen Transmission and REpower of Rs58.97 crore for the December quarter, compared with a profit of Rs152 crore a year ago.
Total income rose to Rs6,893 crore from Rs3,170 crore.
“The long-term fundamentals of the wind industry remains strong. We see an upswing in the industry’s growth from 2010,” chairman Tulsi Tanti said in a statement.
The company’s order book, excluding Hansen and REpower, was Rs10,390 crore, Suzlon said in a separate statement.
Suzlon was still finalising funding options to raise its controlling stake in Germany’s REpower , after it last month agreed to a revised payment schedule to by a 22.4% stake from Portugal’s Martifer .
“There are 4, 5 months left for the acquisition. We will get some from internal accruals, and for additional funds we will look at external markets for debt or any other instruments,” Sinha said.
“We cannot rule out anything,” he said when asked if the company was looking at a stake sale.
Earlier this month Suzlon sold 10% stake in Belgium-based wind turbine gear-box maker Hansen for Rs500 crore.
Cash balances on a consolidated basis at the end of December stood at Rs3,000 crore.
At 1:54 pm, shares in Suzlon, valued at $1.4 billion, were up 2.35% at Rs45.70 in a Mumbai market.