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Suzlon Energy records operating turnaround in Q1 FY12, PAT Rs. 60 crore
Written by Vijay   
Thursday, 04 August 2011
Indore: Suzlon Energy Limited, the world's fifth largest* wind turbine supplier, reported a strong first quarter on operational parameters with an EBIT margin of 8.1 per cent. "Our performance is in line with our full year guidance, and we have maintained a very strong order book at US$ 6.63 billion," said Tulsi R. Tanti, founder, Chairman and Managing Director - Suzlon Group.

"We have reported a profitable first quarter, with a major turnaround from a loss of Rs. 912 crore in Q1 FY11 to a profit of Rs. 60 crore in Q1 FY12," said Robin Banerjee, Chief Financial Officer - Suzlon Energy Limited.

"In addition, we have taken important steps regarding our long-term strategy - we have entered into an irrevocable agreement with ZF Friedrichshafen AG to sell our 26 per cent stake in Hansen for approximately US$ 187 million, and the REpower "squeeze-out" process continues as planned," said  Tanti.

The Suzlon Group order book stood at 4,739 MW (~Rs. 29,291 crore / ~US$ 6.63 billion) in value as on 29th July, 2011; with an order intake of 580 MW since the last announcement.

"We have improved our gross profit levels to 35 per cent despite a very competitive market environment and rising commodity prices. We have maintained our focus on consistently improving operational efficiency, managing our debt profile, and securing orders," Robin Banerjee said.

There has been strong interest in the new Suzlon S9X-2.1 MW suite, specially designed for medium-to-low wind regimes, with over 450 MW in new orders for projects in Australia, Europe, India, and North and South America. Prototypes of the S9X class turbines are now running in Australia and India, with more due to be commissioned later this fiscal. REpower's new 3XM turbine - designed for low wind speed sites - has also seen a strong market response, with over 300 MW in new orders already booked.

Under the "squeeze-out" proceedings, with reference to REpower's minority shareholders, the compensation value was set at EUR 142.77 per no-par value share, putting the total value at approximately EUR 63 million / ~Rs. 398 crore / US$ 90 million. A resolution on the "squeeze-out" is to be tabled at REpower's annual general meeting, scheduled for 21st September 2011.

An irrevocable undertaking was signed to accept the offer from ZF Friedrichshafen AG for Suzlon's current holding of 26.06 per cent equity interest in Hansen Transmissions, for a value of approximately GBP 115 million / ~Rs. 828 crore / US$ 187 million. The Offer represents a premium of approximately 95 per cent, over the closing price of (GBP) 33.75 pence per Hansen share on 22 July 2011. This is in line with Company's strategy to de-leverage and strengthen the balance sheet.

Despite the challenges in developed markets, the wind industry continues to grow with strong momentum in emerging markets and the offshore segment. Recent policy developments on energy security and safety concerns, such as the planned phase out of nuclear in Germany and carbon pricing being introduced in Australia, have placed an increased emphasis on renewables, particularly wind, translating to a positive outlook even in developed markets over the mid-to long-term.

 
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