IEX Reports 4.4% YoY Dip in Profit for Q3 FY23, Trades 23 BU of Power

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The Indian Energy Exchange (IEX) has reported a 4.4% year-on-year (YoY) decrease in profit after tax (PAT) from ₹807 million (~$9.94 million) to ₹772 million (~$9.51 million) in the third quarter (Q3) of the financial year (FY) 2022-23.

However, on a quarter-over-quarter (QoQ) basis, the PAT rose 8.4% from ₹712 million (~$8.77 million).

The revenue for Q3 stood at ₹1.17 billion (~$14.42 million), a 10.3% YoY decrease from ₹1.31 billion (~$16.14 million) during the same period last year.

The revenue increased by 3.1% QoQ from ₹1.14 billion (~$14.05 million).

The earnings before interest, taxes, depreciation, and amortization (EBITDA) for the quarter was ₹1 billion (~$12.32 million), an 10.4% YoY decrease from ₹1.12 billion (~$13.8 million).

On a QoQ basis, the EBIDTA increased by 2.9% from ₹976 million (~$12.03 million).

Electricity volumes traded on the Exchange fell 2.2% YoY, with 23 billion units (BU) traded against 23.5 BU in Q3 FY22.

The volumes declined on the supply side due to the high prices for coal obtained through e-auctions.

According to the company, international coal prices have shot up by more than 128% YoY from April to December. The variable cost of imported coal-based generation increased by over 100% from  ₹4.5 (~$0.05)/kWh to ₹9 (~$0.11)/kWh.

Renewable energy certificates (RECs) amounting to 1.2 BU of renewable power were traded during the quarter, representing a YoY decrease of 68%. This was compared to the exceptionally high REC volumes of 3.83 million in the same quarter last year, as the demand for RECs during that quarter had accumulated due to a 16-month stay on REC trading by the Appellate Tribunal for Electricity.

In a recent order, the Delhi High Court suspended the trading of RECs issued before October 31, 2022, for six weeks.

During Q3 FY23, the total volume at the Exchange was 24.2 BU, representing a 5% increase from the previous quarter across all market segments. However, this volume was still 12% lower compared to the same period last year. The decline was due to limitations in power supply, high prices discovered during the quarter, and high volumes of RECs traded during Q3 FY22.

IEX established a subsidiary, International Carbon Exchange, to facilitate trading in the voluntary carbon market. The goal of this subsidiary is to reduce global greenhouse gas emissions by 45% by 2030 and help achieve the target of limiting global warming to 1.5 degrees. The exchange platform is expected to provide a strong market signal for investing in sustainable projects and help companies efficiently allocate their capital expenditures towards energy transition.