Higher Coal Prices Hurt JSW Energy’s Profit In Fourth Quarter

JSW Energy Ltd. reported a decline in profit for the March-ended quarter due to an increase in international coal prices and lower gains from merchant power sales.

The JSW Group's power generation company saw its bottomline fall 92 percent in the fourth quarter to Rs 24.8 crore compared to the same period last year, according to its stock exchange filing. Sales declined 29 percent. The company's operating profit was 40.6 percent lower, while margins contracted about 680 basis points.

The company missed topline and bottomline consensus estimates of analysts polled by Bloomberg.

"The decrease is primarily due to lower generation and merchant realisations coupled with international coal prices,” a media release by the company said.

Plant load factor, which is the measure of how well plants utilised their capacity, fell 17 percentage points to 52 percent, compared to the previous year. JSW Energy's Ratnagiri plant saw its PLF decline to 47 percent from 92 percent.

The company attributed lower utilisation at its plants to lower tariff realisation.

The company expects the government's push for round-the-clock power supply to boost demand in the long run, which has been subdued for the last 2 years.

Concall highlights:

• Two third of the company's installed capacity has power purchase agreements; rest is sold on exchanges
• Yet to receive permission to sue domestic coal at Vijaynagar and Ratnagiri plants
• Company blends coal with high calorific value from South Africa with lower calorific value coal imported from Indonesia
• Looking to export coal from Canada and Mozambique
• To reduce borrowing cost to 9.5 percent by end of this financial year
• Coal consumption in fourth quarter stood at 1.06 million tonnes
• State discoms' finances improving after UDAY scheme