Sterling & Wilson Solar says Coronavirus will impact revenue

A Sterling and Wilson solar park. (Photo: Business Wire)

February 13 (Renewables Now) - India’s Sterling and Wilson Solar Ltd (NSE:SWSOLAR) on Wednesday reported lower nine-month sales but higher margins, and warned that the Coronavirus outbreak is expected to have a significant impact on its revenues. 

“Currently, the production activities at some of our critical suppliers’ end have stopped and are expected to commence by the end of February 2020. As most material was expected to be shipped in February/March 2020 there is likely to be a significant impact,” Sterling and Wilson Solar said about the Coronavirus. Force majeure notices have been received from suppliers and passed on to customers. Quarantines at destination ports may delay materials reaching sites further, the solar engineering, procurement and construction (EPC) contractor added.

Revenue from operations in the nine months to December 31, 2019 fell by 40.6% year-on-year to INR 35.15 billion (USD 492.5m/EUR 452.5m). The drop was due to delays in the start of work on a large project, and the fact that the previous year result included revenues from a large project in the peak of execution in the Middle East and North Africa (MENA) region. Still, Sterling and Wilson Solar managed to lift its gross and EBITDA margins as it worked on projects offering higher profitability.

The net profit for the nine months arrived at INR 1.76 billion, halving from INR 3.43 billion a year earlier. More details are available in the table.

Results in INR million April-Dec 2019 April-Dec 2018
Profit after tax 1,757 3,434
EBIT 2,264 3,454
EBITDA 2,372 3,510
EBITDA margin (in %) 6.7 5.9
Gross profit 4,618 5,526
Gross margin (in %) 13.1 9.3
Revenue from operations 35,147 59,151

The company achieved positive cash flow from operations of INR 1.19 billion against an outflow of INR 7.67 billion a year earlier. It said it has repaid INR 13.4 billion of external debt (principal) since its initial public offering (IPO).

Order inflow amounted to 2.2 GW or INR 85.5 billion to February 12, 2020. Sterling and Wilson Solar got most of its orders in the period from MENA and Australia. It said is wants to further grow its footprint in Australia, the US and Europe, enter new markets in the Fasr East, South America and Europe, and expand its rooftop business globally. India is also an attractive market for the company.

(INR 100 = USD 1.4/EUR 1.29)

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Tsvet has been following the development of the global renewable energy industry for almost nine years. She's got a soft spot for emerging markets.

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