Suzlon turnaround 'taking longer'

Indian wind turbine group Suzlon claimed it is still on the road to recovery despite posting another big loss for its most recent financial quarter – but admits the turnaround is taking longer than expected.

Suzlon reported a net loss of 7.82bn rupees ($128m) for its second quarter ending September 30.

That was lower than the 8.07bn loss at the same stage in 2012, but was still “significant” because of lower volumes, restructuring costs and currency factors, admitted finance chief Kirti Vagadia.

Quarterly revenues were 47.69bn rupees, ahead of the preceding three months’ figure but down on the 57bn rupees it pulled in at the same stage last year.

However, Suzlon took comfort from being able to post a positive number for the quarter – a 390m rupees earnings before interest, tax, depreciation and amortisation (Ebitda) figure, before foreign exchange losses, and said its operational fortunes are looking up.

Vagadia said: “We continue our focus on increasing volumes while optimizing fixed costs, opex and working capital, which will enable us to improve our financial performance.

"We believe we are on the way to recovery, and while this has taken longer than envisaged, with the support of our key stakeholders we are on our way to achieve this.”

Operating expenses were 38% down year-on-year as the company saw the impact of major cost-reduction initiatives.

The Suzlon group had an order intake of 395MW during the quarter, and its total order book stood at 5.1GW, worth $7.1bn, by the end of the period, said the company.

Deliveries were 220MW, the same as in the preceding quarter.

Suzlon chairman Tulsi Tanti pointed to positives including the company’s entry into the Uruguay market, the divestment of 75% of its China manufacturing arm, and the launch of a new turbine variant for low-wind sites.

“Despite significant challenges our business is improving steadily,” Tanti claimed.

The company is still in “active, solution-oriented dialogue” with its bondholders and other creditors.