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Bloomberg
Suzlon Energy Ltd. reported its lowest quarterly profit in a year as India’s support for auction mechanism to build wind energy projects slowed orders.
The profit of $7.65 million during the usually quiet fiscal first quarter compared with a loss of 2.6 billion rupees in the year-ago period, according to a filing to the Indian stock exchange. The previous three quarters each provided profit over 2 billion rupees.
India in February started the first auctions for wind-energy capacity, where developers bid against each other for contracts to build projects. That both brought down the cost of renewables and unsettled companies accustomed to more predictability on what price they would be paid under the earlier feed-in-tariff regime.
“The transition from feed-in-tariffs to competitive bidding has created temporary volatility in terms of volume and margins,†Chief Executive Officer J.P. Chalasani said.
The government’s shift in incentives comes at a delicate time for Suzlon, which has been struggling to exit a debt restructuring program after its 2012 default on $209 million of dollar-denominated convertible bonds.
The company had planned to finished the programme in March and then three months ago pushed that milestone back to September. A spokeswoman for the company said that the restructuring would finish sometime in the current financial year.
“In order to cope with the temporary uncertainties in the domestic market we have further strengthened our risk management in order to maintain our margins,†CFO Kirti Vagadia said.