Rains and currency effects hit KSK Power Ventur

29th Nov 2013 08:50

A longer monsoon period hit Indian energy company KSK Power Ventur in the first half of the year, tripling pre-tax losses as revenues dropped by almost a quarter. Group revenues fell 24% to $150.7m in the six months to September 30th, though if rupee-dollar exchange rate movements are excluded this produces an underlying fall of 18%. Operating profit decreased by 48% to $30.36m and losses before tax tripled to $115.2m.The London main market-listed company said it expected the full year to see increased power generation as the second half enjoyed an uninterrupted contribution from existing generation operations as well as a contribution from the first 600 megawatt unit at the new Mahanadi plant in Chhattisgarh state, in central India. KSK explained that profitability would still depend on several issues, including addressing issues with coal supplier Western Coalfields in Wardha, where the thermal quality has been lower than contractually agreed and the company has been in discussions to pursue remedial action since the beginning of the year. The group also said it needed to tie up the fuel supply agreement and achieve necessary coal supplies for Mahanadi under the agreement that it said had been "long overdue" from the Indian government. KSK said any further delays would result in the company having to depended on higher-cost open-market or imported coal, which would put short-term pressure on margins.Shares in KSK, having more than halved from 400p since the start of the year, were unmoved on Friday at 167.5p. OH