Coal news and updates

May import 16 MT coal in FY14: NTPC

NTPC chairman Arup Roy Choudhury told CNBC-TV18 that in the second half of FY14, availability of fuel will see substantial improvement.

Country's largest power producer, NTPC , sees demand for electricity going up as few states prepare for Assembly elections in next few weeks. Currently, NTPC has a capacity of nearly 42,000 MW and targets to add about 14,000 MW to its total capacity by the end of 2016-17. NTPC chairman Arup Roy Choudhury told CNBC-TV18 that in the second half of FY14, availability of fuel will see substantial improvement. The company is likely to import 16 million tonne of coal this fiscal. NTPC has recently sought market regulator Sebi's approval to raise up to Rs 1,750 crore through tax free bonds in the current financial year to fund capital expenditure and refinancing for meeting the debt requirement in on-going projects. The company is also open to buying out distressed assets.

Below is the verbatim transcript of his interview on CNBC-TV18
Q: In terms of demand, there was a tapering of electricity demand especially because the prices started rising. How is the current demand trend?

A: Demand has been increase so we are generating 100 million units more than what we were doing a month ago. Going forward we think demand will increase much more because of elections. But as chairman of NTPC, my plants are available, so doesn’t matter if there is a demand or not my business model is on making plants available. They are available much more than they were available for the corresponding period last year.

Q: The bright side in Q2 for you was improvement in fuel availability, plant availability factor (PAF). Do you expect your PAF to improve further in Q3, now that you are arranging for imports and regular supply from Coal India (CIL)?

A: Yes we have planned well. This year our imports are going to be almost 16 million tonnes. We have committed to improve our availability factor more than last year. CIL has supplied more to us maybe because of poor health of SEBs. So I can only say we are going to have more availability going forward.

Q: Can you guide us as to what could be the P-A-F percentage in the current quarter, will it be more than 85.9?

A: Yes that is all I can say.

Q: You have got a substantial amount of greenfield projects relying on coal blocks awarded to you in July 2013. By when do you think you will be able to tap this coal?

A: My expansion as of today - 20000 MW is under execution and our 12 plant target is 14000MW. 4000 MW we have already achieved so in the twelfth plan we only have to do 10000 MW out of the 20,000 MW. Therefore in 12 th plan we will do much more than we have targeted .But for the expansion plans which are linked to these coal mines will happen in next 4-5 years. That is the time we will be mining 100 mt of coal ourselves from our own mines.

Q: Do you expect tapping of those coal blocks in Chattisgarh and Odisha to get delayed for any reason probably because of delays in securing clearances or land acquisition?

A: I do not know. There were so many uncertainties in coal mining and support of state government is very important. There are problems all the time but we should be prepared to solve them, talk to people, and settle it. I can only say that state government have realised that opening up these mines, putting up industries only increases industrial output, employment etc. So they are also coming on board with us and so with state government with us we should be able to do it very successfully

Q: Can you give us a time line as to when you will be able to mine from those coal mines in Chattisgarh and Odisha?

A: We are now talking of having mine developer-cum-operator (MDOs). So therefore we are targeting between 3-5 years from coal to start from these blocks. NTPC stock price On November 22, 2013, at 10:52 hrs NTPC was quoting at Rs 150.55, up Rs 0.45, or 0.30 percent. The 52-week high of the share was Rs 167.25 and the 52-week low was Rs 122.65. The company's trailing 12-month (TTM) EPS was at Rs 14.55 per share as per the quarter ended September 2013. The stock's price-to-earnings (P/E) ratio was 10.35. The latest book value of the company is Rs 97.49 per share. At current value, the price-to-book value of the company is 1.54.

Q: On the issue of stressed assets. You were going to take over some of those people from whom receivables are still due. Any progress on taking over those stressed assets?

A: We have no dues. Our payments are upto date. What you are referring to is an answer to a question we had given that are we willing to look at distressed assets in country. For the moment, I can say that we are looking at a few of them but I can’t tell you when we can come up with a decision. We don’t start projects till we have all five clearances that is the land, environment, water, the Power Purchase Agreement (PPA) and the coal linkage. The second thing we look at is the quality of equipment because we run them our plants for long, almost 45 years and not just for 15 years.

Q: Coming to the other question of contingent liability - the difference between the amount built by CIL and the amount admitted by NTPC that was getting counted by contingent liability. Is that expected to increase in Q3?

A: I dint think that was any issue because the payment is being paid on calorific value of coal received. Now the issue has been resolved because CIL has appointed a third party quality monitor, which will certify the quality of coal at both ends. Therefore there is no dispute and that is the rate at which payment will be made.

Q: In Q2 your sales were flat and EBITDA was marginally down. How would things pan out in H2. Would we see an improvement in pace of sales?

A: I think we have done 9.2% growth YoY in Q2, which is fantastic in these times. 8.4% is half yearly increase. Don’t look at the pre-period payments because they keep happening in regulated regime. We also have many petitions filed on water charges etc. If it comes through it will come through this fiscal year but we can’t say anything on that. You must compare the actual results, the adjusted result on QOQ, which have been fantastic.

Q: What is the key message you are giving via your book - 'Management by Idiots'?

A: I have request to you also. Please read the book it docent take more than one hour and give me a feed back. This is all about real life experience of doing management for the last 34 years in Indian environment that what you have learned from text books.

It is all about a person who has done it and has been successful in doing various things.



Source: Moneyontrol