Azure Power has announced the consolidated results for the first quarter (Q1) of the financial year (FY) 2021.

According to the financial statement released by the company, the company registered a revenue of ₹3.9 billion (~$52.2 million), an increase of 16% compared to the same period last year. The net profit for the quarter ended June 30, 2020, fell to ₹46 million (~$615,195) from ₹171 million ($2.27 million) posted in Q1 2019.

The company stated that the profits were negatively impacted due to a one-time charge of ₹264 million (~$3.5 million) for a debt refinancing transaction and ₹173 million ($2.3 million) of higher income tax expenses.

The adjusted earnings before interest, taxes, depreciation, and amortization (EBIDTA) for the quarter ended June 30, 2020, were ₹3.3 billion (~$43.7 million), an increase of 29% a year earlier in the same quarter.

The company further stated that the cash flow to equity for operating assets for the quarter ended June 30, 2020, was ₹1.6 billion (~$21.7 million), an increase of 45% in the same quarter last year. As of June 2020, the operating megawatts were 1.8 GWs, an increase of 12% over June 30, 2019. The operating and committed megawatts were 7.1 GWs, as of quarter ended June 30, 2020, an increase of 112% over the quarter ended June 30, 2019. Committed megawatts included 4 GWs for which the company has received letters of award (LOA) but the power purchase agreements (PPAs) have not yet been signed. The PPAs for these 4 GWs will follow only after the sale of power is contracted by SECI under a power sale agreement (PSA).

Further, the company, in its announcement, said that electricity generation during the Q1 FY 2021 was 883.9 million kWh, an increase of 183.8 million kWh or 26% compared to Q1 2019. The plant load factor for Q1 FY 2021 was 23.1%, as compared to 19.4% during the same quarter of last year. According to the company, this was mainly due to the addition of DC capacity and improved performance of the company’s projects.

The company noted that it did not commission any significant capacity during Q1 FY 2021 due to the COVD-19 disruptions. It stated that the majority of under-construction projects would be completed before the expected revised commissioning dates.

The operating revenues for Q1 FY 2021 were ₹3.9 billion (~52.2 million), an increase of 16% when compared to Q1 2019. This was driven by the revenue generated from projects which were commissioned during the period after June 30, 2019, and additional revenue of ₹73.1 million (~$1 million) in safeguard duty (SGD) and Goods and Service Tax (GST) reimbursement for three of the company’s projects. Mercom had earlier reported that the Solar Energy Corporation of India (SECI) had disbursed about ₹119.9 million (~$1.6 million) towards GST and SGD claims by developers and Azure Power was one among them.

The cost of operations for the quarter ended June 30, 2020, decreased by 11% to ₹263 million (~$ 3.5 million) from ₹297 million in the same quarter last year. The lower cost of operations was primarily due to cost efficiencies, and the lower cost incurred during the quarter due to the pandemic, which amounted to ₹50 million (~$668,690). Due to the lockdown and shortage of labor, there was less module cleaning and other operation and maintenance activities.

The company also mentioned that the net interest expense during Q1 2021 increased by ₹603 million (~$8 million), or 39%, to ₹2.2 billion (~$28.7 million) a year earlier in the same quarter. The increase in net interest expense was because of the ₹303 million ($4 million) additional expense related to projects commissioned during the past 12 months, a one-time charge of ₹264 million ($ 3.5 million) for a debt refinancing transaction and lower interest income due to lower free cash available during the quarter.

The company stated that the cash flow in operating activities for Q1 FY 2021 was ₹562 million (~$7.5 million), compared to ₹459 million (~$6.14 million) for the quarter ended June 30, 2019. The cash used in operating activities was higher because of the additional semi-annual payment on bond interest on the $350 million (~$4.6 million) solar green bond issued in September 2019.

During Q1 FY 2021, the working capital outflow was ₹2.2 billion (~$29.6 million), compared to an outflow of ₹1.5 billion, during the same period last year.

As of June 30, 2020, the company had ₹7.9 billion (~$105.5 million) of cash, cash equivalents, and current investments.

The company said that it was continuously monitoring the COVID-19 situation and taking the necessary steps to address the situation.

“Our construction activities are gradually increasing to normal levels; however, they have still not reached the pre-COVID-19 or planned level. However, we expect our projects to get commissioned within the expected revised commissioning deadlines, as extended by respective counterparties and within the original budgeted cost,” the company added.

During the quarter, the company received a notice from one of the power distribution companies (DISCOM) requesting a one-time discount due to COVID-19. Azure is entitled to full recovery of its receivables, per the terms of the power purchase agreement and has responded accordingly to the DISCOM.

According to Mercom’s India Solar Market Leaderboard 2020, Azure is one of the top five utility-scale and rooftop solar project developers in India.

 

Image credit: Azure Power