Suzlon Energy, the wind energy turbine maker, has reported a consolidated loss of Rs 808 crore for the second quarter, amidst the challenges of debt restructuring and a weak macro-economic outlook.
The Pune-based company had posted a profit of Rs 48 crore in the same period last year. Revenue rose 11 per cent to Rs 5,702 crore from Rs 5,131 crore in the same period last year but raw material costs and interest costs rose sharply, resulting in a loss. On the operating level, the company recorded a loss of Rs 300 crore as against a profit of Rs 311 crore last September. Last month, Suzlon defaulted on redemption of foreign currency convertible bonds worth $220 million, after bond holders rejected a request for extension. The company has begun discussions with Indian lenders to restructure its Rs 13,000 crore debt, seeking a two-year moratorium on certain payments, and additional working capital. It has also suspended its earlier revenue and margin expectation for the current year.
Tulsi Tanti, group chairman, said: "The first half of the financial year has been disappointing. Our performance was affected by macro-economic headwinds and policy uncertainties in some key markets, as well as internal challenges around liability management and sub-optimal capital allocation to business operations."
He added, "Despite this, key metrics point in the right direction. We have continued to grow revenues year-on-year, our product offerings are highly competitive in the marketplace, our firm order book stands at an extremely robust $6.84 billion and REpower (the German subsidiary) continues to maintain a solid growth trajectory.''
The company signed firm new orders for 1,070 Mw during the quarter.
Kirti Vagadia, chief financial officer for the group, said: "Allocation of cash towards addressing financial liabilities, combined with working capital constraints, acted as a significant limiter on our performance in the first half of the financial year. Addressing this is now the central focus of our change agenda. We have launched several key initiatives to bring down fixed costs and reduce working capital intensity, and continue our sale of non-critical assets as we right-size the business."