India's Reliance Power beats 1Q EBITDA forecasts with INR6.3bn

However, its PAT is 12% below expectations.

At INR6.3bn, India-based Reliance Power's consolidated EBITDA came in 8%/5% above nalyst/consensus forecasts but consolidated PAT (INR2.4bn) came in 12%/17% below analyst/consensus forecasts.

According to a research note from Nomura, the scenario is attributed to a combination of higher than expected profitability (RoE) of Rosa facility, and operating expenses (excluding fuel cost, which was in-line) being 21% below Nomura's forecast.

Further, factors include depreciation being ~7% above Nomura's forecast (economic life of solar PV plant lowered from 25yrs to 15yrs as RPWR adopted norms as per the new Companies Act for this facility).

Lastly, other factors were finance cost being ~23% above Nomura's forecast (over 60% of Butibori’s project cost capitalized withUnit 2 on April 1 + cost of borrowings on stand-alone books), and 30% lower ‘Other Income’, likely on the back of lower treasury gains.

Here's more from Nomura:

Return on regulated equity (RoE) at 47.5% in 1QFY15 (vs. 41% in 4QFY14, 40% in 1QFY14). Rosa (1200MW) posted impressive operating metrics in 1QFY15 – PlantAvailability (PAF) was 104% (91% in 4QFY14, 100% in 1QFY14) and utilization level (PLF) was 94% (75% in 4QFY14, 72% in 1QFY14).

Butibori: Return on regulated equity (RoE) at ~17% in 1QFY15; cost of power at ~INR6/kWh as project was largely fired by non-linkage coal. As per management’s commentary, the 600MW Butibori facility posted a revenue/EBITDA was INR4.7bn/INR1.7bn in 1QFY15; average PAF was ~75%, but earnings reflect 100% fixed cost recovery as per the provisional tariff order issued by Maharashtra Electricity Regulator (MERC).

Sasan: Unit-6 start-up timeline pushed back to end-CY14. Management indicated a commissioning timeline of end-CY14 for the final unit (Unit-6) of Sasan UMPP (vs. previous guidance of the project to be fully commissioned by June/July 2014).