Essar Power reported a total income of Rs735 crore for the year 2004-05 as compared to Rs549 crore in the previous year, an increase of 34%. Profit before interest, depreciation and tax stood at Rs414 crore, an increase of 15% over Rs360 crore achieved last year. After providing for interest cost of Rs175 crore, depreciation of Rs117 crore and corporate tax of Rs3 crore, net profit stood at Rs119 crore as against Rs60 crore last year, a rise of 97%.
The company's operations saw some significant positive changes as a result of its thrust on cost reduction and operational efficiencies. Successful transition from high cost naphta to natural gas from April 2004 under long-term supply agreements ensured significant cost reduction and guaranteed supply of gas. Plant load factor went up to 93% from 86% last year, which was the highest ever since the company commenced operations.
During the year, the company refinanced long-term debts aggregating to Rs1019 crore to refinance its high cost loans and thus brought down its cost of debt to 8.66%.
Mr AK Srivastava, Managing Director, Essar Power, said "We have consolidated our operations and are well positioned to be an important player in India's power sector. We are expanding capacities and are looking at entering the areas of distribution and as we go forward."
Essar Power has finalized plans to augment its generating capacity from 515 MW to 2000 MW at an investment of Rs4000 crore, which works out to approximately Rs2.7 crore per MW.
Essar Power is India's first independent power producer in the private sector and enjoys the lowest manpower-to-megawatt ratio.