Faulty blades, forex call leave Rs 183-cr hole in Suzlon books

A huge loss suffered through currency options and the expense incurred in replacing faulty blades supplied to the US customers saw Tulsi
Tanti-owned Suzlon Energy slipping into the red. The company on Sunday announced a standalone loss of Rs 183 crore for the quarter ended March this year against a profit of Rs 482 crore for the same period last year. Its standalone income from operations fell to Rs 2,040 crore in the same period from Rs 2,746 crore.

The company said its revenues will remain flat in the coming months due to lack of demand from its key markets. “We are dealing with a very difficult external environment, where the wind industry has gone through a reasonably significant external correction. From a growth rate of about 30% over the past several years, we are now moving to a situation where there will be a flat growth in the industry,” warned Suzlon’s chief operating officer Sumant Sinha.

The company’s sales were hit after some blades cracked and customers in the United States cancelled their orders. The replacement of blades, which will be completed by August this year, has cost the company Rs 411 crore.
The company also suffered losses on FCCB front. “We have suffered marked-to-market losses related to foreign currency convertible bonds besides other general hedging losses. We also had certain blade retrofit issues. Fortunately, a lot of those costs are behind us,” Mr Sinha said.

On the sale of its 61% stake worth $1 billion in its Belgian arm Hansen, Mr Sinha said the company is in early stage of talks with potential buyers. On a consolidated basis, Suzlon’s income from operations was Rs 9,208 crore in the March quarter of this year with a profit of Rs 410 crore. The company has partially included REpower revenues as it completed the acquisition this month. Suzlon’s shares closed at Rs 123.35 on Friday on the Bombay Stock Exchange.