Moser Baer: Fiscal 2Q14 Financial Results

Summary

• Total income stood at INR 3,166.3 million during the quarter partly affected by short term liquidity challenges
• EBITDA margin stood at 7.5%, up from 6.7% during Q2 FY’13
• Second quarter financials affected by an unrealized forex loss of INR 284.5 million on account of the long term foreign currency liabilities
• Based on the recent announcement of Domestic Content Regulations (DCR), under Jawaharlal Nehru National Solar Mission, the company is finalizing plans to recommence cell manufacturing and is in discussions with banks for the corresponding facilities
• Demand and ASPs during the quarter affected by the ongoing reshuffle in the global optical media industry
• The company’s systems business continues to be the largest player in India (reported by Bridge to India).

Moser Baer India Limited (MBIL) released its financial results for the second quarter of FY ’14.

The company’s board of directors, at its meeting in New Delhi, approved the financial results for the quarter ended September 30, 2013.

Commenting on the quarter’s performance, Bhaskar Sharma, CEO, storage media, MBIL, said: “Consolidation of manufacturing activity at one location is helping optimize operations cost, thereby resulting in improved performance. We are now focusing on growing the solid state media business and development of LED lighting business.”

KN Subramaniam, CEO, Moser Baer, PV systems, said: “We are indeed excited to have emerged as the largest participant in the Indian solar EPC market. MBSL is the largest Solar EPC player in India as per a recent report by Solar Consulting firm Bridge to India. As a technology neutral company, we have excelled in execution of projects of all sizes across regions and terrains. India’s solar energy market has picked up steam since its modest 2 beginning a few years back. We welcome the MNRE phase II guidelines that aim at rapid solarization of India over the next few years. While the Indian solar market holds great potential with abundant sunshine and a strong policy environment, project financing is proving as a key challenge and calls for special attention.

Commenting on the results, Yogesh Mathur, Group CFO MBIL said: “During the quarter, the company faced short term liquidity challenges which are being addressed with active co-operation of our banks. We continue to ramp up operations in Solid State Media and develop emerging technologies. Further, the company is focusing on rationalizing operating costs and consolidating operations to generate cost efficiencies.”

Storage Media

• Market demand and ASPs affected by the ongoing reshuffle in the global optical media industry
• During 2013, sales of Blu-ray discs continued to witness significant growth in the US (largest home entertainment consumer market)
• As per industry experts, over the next few quarters anticipated exit of tier II/tier III players from the market is expected to result in return of demand supply balance to the industry
• Moser Baer working towards further rationalizing the operating costs work underway to consolidate manufacturing operations to generate cost efficiencies

Solar photovoltaic

• Global PV installations continued to remain strong during 3Q CY 2013 due to high demand from China, Japan and the US during Q3 CY 2013, global solar PV installations reached a record 9GW, up by 20% Y/Y and 6% Q/Q total PV installations reached~23GW during 9M CY 2013, with a record 17GW during Apr-Sep 2013 (Solarbuzz)
• Ongoing consolidation in the industry continued during the third quarter with tier I manufacturers capitalizing on the high demand to raise their market shares
• In the Indian PV market, 3Q CY 2013 witnessed installation of 155MW of Solar power taking aggregate 2013 installations to 935MW by the end of September 2013 (Bridge to India)
• In October 2013, the Cabinet Committee on Economic Affairs approved MNRE’s implementation guidelines for 750MW of grid connected solar projects under Batch I Phase II of JNNSM of which 375MW are under DCR
• Moser Baer’s margins in the high growth Japanese market are holding on well, despite the heightened competition additional opportunities exist for exports to Europe at improved price points, consequent upon EU stipulating quantitative restrictions and price thresholds on Chinese Imports
• Based on the commencement of Domestic Content Regulations, the company is finalizing the plans to restart cell manufacturing and is in dialogue with banks for corresponding working capital facilities
• The company’s position in systems business in India was confirmed by Solar consulting firm ‘Bridge To India’ that in September 2013 reported Moser Baer as the largest solar EPC player in India
• The Module manufacturing continues at 60+MW level (annualized) for the high margin Japanese market