Azure Power Announces Results for Fiscal Second Quarter 2018

Publié le 14 nov. 2017
Azure Power 
Azure Power Global Limited announced its consolidated results under United States Generally Accepted Accounting Principles for the second quarter ended September 30, 2017.

Second Quarter 2018 Period Ended September 30, 2017 Operating Highlights:

- Operating Megawatts were at 803MW, as of September 30, 2017 an increase of 124% over September 30, 2016.

- Operating & Committed Megawatts were at 1,381MW, as of September 30, 2017 an increase of 35% over September 30, 2016.

- Revenue for the quarter was INR 1,823.8 million (US$27.9 million), an increase of 104% over the quarter ended September 30, 2016.

- Adjusted EBITDA for the quarter was INR 1,499.5 million (US$23.0 million), an increase of approximately 167% over the quarter ended September 30, 2016.

Key Operating Metrics

Electricity generation during the six months ended September 30, 2017 increased by 306 million kWh, or 111%, to 581 million kWh, compared to the same period in 2016. The increase in electricity generation was principally a result of additional capacity operating during the period.

Total revenue during the six months ended September 30, 2017 was INR 3,701.7 million (US$ 56.7 million), up 93% from INR 1,916.6 million during the same period in 2016. The increase in revenue was primarily driven by the commissioning of new projects.

Project cost per megawatt operating consists of costs incurred for one megawatt of new solar power plant capacity during the reporting period. The project cost per megawatt operating for the six months ended September 30, 2017 decreased by INR 7.0 million (US$ 0.11 million) to INR 51.1 million (US$ 0.78 million), as compared to the same period in 2016. The decline is due to decreasing solar module prices and the reduction in the balance of system costs.

As of September 30, 2017, our operating and committed megawatts increased by 360MW to 1,381MW compared to September 30, 2016 as a result of winning new projects.

On October 16, 2017, the Company announced that it has won 250MW of new projects. This brings the Operating and Committed Megawatt capacity to 1,631MW.

Nominal Contracted Payments

The Company’s PPAs create long-term recurring customer payments. Nominal contracted payments equal the sum of the estimated payments that the customer is likely to make, subject to discounts or rebates, over the remaining term of the PPAs. When calculating nominal contracted payments, the Company includes those PPAs for projects that are operating or committed. The following table sets forth, with respect to our PPAs, the aggregate nominal contracted payments and total estimated energy output as of the reporting dates. These nominal contracted payments have not been discounted to arrive at the present value.



Nominal contracted payments increased from September 30, 2016 to September 30, 2017 as a result of the Company entering into additional PPAs. Over time, the Company has seen falling benchmark tariffs as reported by Central Electricity Regulatory Commission, in line with the reduction in solar module prices.

Portfolio Run-Rate

Portfolio run-rate equals annualized payments from customers extrapolated based on the operating and committed capacity as of the reporting dates. In estimating the portfolio run-rate, the Company multiplies the PPA contract price per kilowatt hour by the estimated annual energy output for all operating and committed solar projects as of the reporting date. The estimated annual energy output of the Company’s solar projects is calculated using power generation simulation software and validated by independent engineering firms. The main assumption used in the calculation is the project location, which enables the software to derive the estimated annual energy output from certain meteorological data, including the temperature and solar insolation based on the project location.

The following table sets forth, with respect to the Company’s PPAs, the aggregate portfolio run-rate and estimated annual energy output as of the reporting dates. The portfolio run-rate has not been discounted to arrive at the present value.


Portfolio run-rate increased by INR 2,267.5 million (US$ 34.7 million) to INR 12,827 million (US$ 196.4 million) as of September 30, 2017, as compared to September 30, 2016, due to an increase in operational and committed capacity.

Second Quarter Period ended September 30, 2017 Consolidated Financial Results:

Operating Revenue

Operating revenue in the quarter ended September 30, 2017 was INR 1,823.8 million (US$ 27.9 million), an increase of 104% from INR 894.9 million over the same period in 2016. The increase in revenue was driven by the commissioning of new projects.

Cost of Operations

Cost of operations in the quarter ended September 30, 2017 increased by 92% to INR 144.7 million (US$ 2.2 million) from INR 75.4 million in the same period in 2016. The increase was primarily due to plant maintenance cost for newly commissioned projects which was partially offset by the implementation of improved O&M methods which improved plant productivity. This includes INR 17.6 million (US$ 0.3 million) of non-cash expense, which pertains to the amortisation of lease expense.

General and Administrative Expenses

General and administrative expenses for the quarter ended September 30, 2017 decreased by INR 78.8 million (US$ 1.2 million), or 30%, to INR 179.6 million (US$ 2.8 million) compared to the same period in 2016. General and administrative expenses was lower due to lower legal and professional expenses in the current period as compared to same period last fiscal on account of the Company’s Initial Public Offering last year in the same period and due to platform of economies of scale.

Depreciation and Amortization Expenses

Depreciation and amortization expenses during the quarter ended September 30, 2017 increased by INR 216.5 million (US$ 3.3 million), or 88%, to INR 463.0 million (US$ 7.1 million) compared to the same period in 2016. The principal reason for the increase was capitalization of new projects during the period from June 30, 2017 to September 30, 2017.

Interest Expense, Net

Net interest expense during the quarter ended September 30, 2017 increased by INR 1,781.6 million (US$ 27.3 million), or 305%, to INR 2,364.9 million (US$ 36.2 million) compared to the same period in 2016. It includes one-time non-cash write offs of unamortised deferred financing cost of INR 615.5 million (US$ 9.4 million) on account of the solar green bond and in addition, one-time prepayment fees of INR 658.4 million (US$ 10.1 million) for debt refinancing related to the solar green bond. Interest expense increased on account of borrowings for new projects during the quarter ended September 30, 2017.

Loss on Foreign Currency Exchange

The Indian rupee appreciated against the U.S. dollar by INR 0.9 to US$ 1.00 (1.4%) during the period from June 30, 2016 to September 30, 2016, while the Indian rupee depreciated against the U.S. dollar by INR 0.68 to US$ 1.00 (1.1%) during the period from June 30, 2017 to September 30, 2017. This depreciation during the period from June 30, 2017 to September 30, 2017 resulted in a foreign exchange loss of INR 43.0 million (US$ 0.7 million), compared to a gain of INR 76.1 million during the same period in 2016.

Income Tax Expense / Benefit

The income tax benefit increased during the quarter ended September 30, 2017 by INR 77.1 million (US$ 1.2 million) to INR 130.9 million (US$ 2.0 million), compared to the same period in 2016. The increase in the income tax benefit was primarily on account of the commissioning of new projects. During the current quarter, we recorded a deferred income tax benefit amounting to INR 130.9 million (US$ 2.0 million) and there was no cash outflow relating to income taxes during the period.

Net Loss

Net loss for the quarter ended September 30, 2017 was INR 1,240.5 million (US$ 19.0 million), as compared to a net loss of INR 138.9 million for the quarter ended September 30, 2016, an increase in loss of INR 1,101.7 million (US$ 16.9 million) as compared to the same period in 2016. This was primarily due to one-time expenses related to the issuance of solar green bond, and was partially offset due to an increase in revenue during the quarter ended September 30, 2017.

Cash Flow and Working Capital

Cash generated from operating activities for the six months ended September 30, 2017 of INR 227.8 million (US$ 3.5 million), INR 37.7 million (US$ 0.6 million) higher than prior comparable period, primarily due to increase in revenue during the current period.

Cash used in investing activities, for the six months ended September 30, 2017 was INR 5,272.6 million (US$ 80.7 million), compared to INR 5,494.6 million for the prior comparable period. The cash used in investing activities was lower due to higher realization of permitted investments and release of restricted cash from bond offering.

Cash generated from financing activities was INR 15,351.0 (US$ 235.1 million) for the six months ended September 30, 2017, compared to INR 8,329.9 million for the prior comparable period. During the six months ended September 30, 2017, the Company raised INR 40,164.0 million (US$ 615.1 million) of project debt, including green bonds and non-convertible debentures.

Liquidity Position

As of September 30, 2017, the Company had INR 16,530.6 million (US$ 253.1 million) of cash, cash equivalents and current investments. The Company had undrawn project debt commitments of INR 5,359.2 million (US$ 82.1 million) as of September 30, 2017.

Adjusted EBITDA

Adjusted EBITDA was INR 1,499.5 million (US$23.0 million) for the second quarter period ended September 30, 2017, compared to INR 561.1 million in the second quarter period ended September 30, 2016. This was primarily due to the increase in revenue during the period.

Derivatives and Hedging

The Company elected to follow hedge accounting ASC 815 for the derivative contracts related to the green bond issuance and early adopted the FASB amendment ASU 2017-12 during the quarter and recorded a derivative asset of INR 246.0 million (US$ 3.8 million) as of September 30, 2017.

Guidance for Fiscal Year 2018

The following statements are based on current expectations. These statements are forward-looking and actual results may differ materially. The Company continues to expect revenues for fiscal year 2018 ending March 31, 2018 of US$ 118 - 125 million and that 1,000 - 1,200MW will be operational by March 31, 2018.


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