According to reports, Suzlon Energy Ltd. Thursday posted its biggest ever quarterly loss on lower domestic sales as the beleaguered wind-turbine manufacturer battles to stay afloat amid high debt and working capital constraints.
Net loss for the October-December period widened four times to 11.55 billion rupees ($214 million) from 2.86 billion rupees a year earlier, the company said in a statement. It was Suzlon’s fifth straight quarterly loss.
Revenue for the period fell 19.5% to 40.14 billion rupees.
The average forecast in a poll of three analysts was for a net loss of 5.31 billion rupees on sales of 53.33 billion rupees.
“…our business performance has been adversely hit due to our abnormal operating environment, leading to a significant loss for the quarter,” Chief Financial Officer Kirti Vagadia said in a statement.
The withdrawal of subsidies on wind energy generation, amid pressure on Indian government finances, is hurting this renewable energy segment. It has led to pressure on turbine manufacturers including Suzlon–which is already battling against a consolidated net debt of 135.87 billion rupees and high interest costs.
Chairman Tulsi Tanti said even though liquidity constraints hurt its operations, the company is upbeat on the outlook as lenders recently approved its debt restructuring plans.
“While we anticipate that near-term challenges will continue to impact the industry over 2013, there are some green-shoots across global markets,” Mr. Tanti said. The company anticipates India to revive subsidy support for wind mills and the U.S. to continue its ongoing incentives to drive the sectoral growth.
The debt-recast package was approved last month by a consortium of 19 banks. Suzlon’s lenders have among other things demanded that the company raise about $1 billion in three years as part of the debt-recast program.
Its current order book is valued at $7.7 billion, up 2.6% from the year-ago period.
Its investors have been wary about its finances, especially after holders of its foreign bonds declined in October to extend the date of repayment, leading Suzlon to default on $220.8 million of debt.
Before the announcement of the quarterly result, Suzlon’s shares ended Thursday 3.71% up at 23.75 rupees, outperforming the overall Mumbai market, which lost 0.57%.