Azure Power Q3 Results See Losses Narrow, Generation Up 36%

Azure Power Global Limited (Azure Power), which is listed on the NYSE, has announced its consolidated results under United States Generally Accepted Accounting Principles (“GAAP”) for the third quarter of fiscal 2022, ended December 31, 2021.

Operating Highlights:

• Megawatts (“MWs”) Operating* were 2,523 MWs, as of December 31, 2021, an increase of 37% over December 31, 2020. Operating, Contracted & Awarded MWs* were 7,425 MWs, as of December 31, 2021.
  
  Contracted & Awarded megawatts included 1,537 MWs for which the firm received Letters of Award (“LOA”), but the Power Purchase Agreements (“PPAs”) had not been signed as of December 31, 2021.
• Operating revenues for the quarter ended December 31, 2021, were Rs 448 crores (US$ 60.2 million), an increase of 27% over the quarter ended December 31, 2020.
• Net loss for the quarter ended December 31, 2021, was Rs  61 crores (US$ 8.2 million) against the net loss of Rs 108 crores  for the quarter ended December 31, 2020. The decrease in loss in current quarter was primarily due to additional revenue from customers, reversal of stock appreciation rights (SARs) expense, offset by an increase in interest and tax expense.
• Adjusted EBITDA for the quarter ended December 31, 2021, was Rs 393.5 crore (US$ 52.9 million), an increase of 152% over the quarter ended December 31, 2020. The increase was primarily due to additional revenue from new projects, revenue from customers and reversal of stock appreciation rights (SARs) expense during the quarter ended December 31, 2021.
• Non-GAAP Cash Flow to Equity (“CFe”) from operating assets for the quarter ended December 31, 2021, was Rs 194.1 crores (US$ 26.1 million), an increase of 58% over the quarter ended December 31, 2020. The increase was primarily due to projects which were commissioned after the quarter ended December 31, 2020, and incremental revenue from customers.

*Megawatts Operating and Megawatts Operating, Contracted & Awarded exclude the Rooftop portfolio, for which we entered into an agreement to sell in April 2021. We excluded 153 MWs from our Operating, Contracted & Awarded portfolio as of December 31, 2021, and the prior comparative period. We excluded 153 MWs from our Operating portfolio as of December 31, 2021, and 147 MWs from prior comparable period. The exclusion from prior period is for the purpose of comparison with current period, however we continue to consolidate these assets as of December 31, 2021.

Key Operating Metrics

Electricity generation during the quarter and nine-months ended December 31, 2021, was 1,068 million kWh and 3,181 million kWh, respectively, an increase of 284 million kWh or 36%, over the quarter ended December 31, 2020, and an increase of 744 million kWh or 31%, over the nine months ended December 31, 2020. The increase in electricity generation was principally a result of an additional 689 MWs of AC (805 MWs DC) operating capacity, including its Rooftop portfolio commissioned since December 31, 2020.

Azure’s Plant Load Factor (“PLF”) for the quarter and nine months ended December 31, 2021, was 19.6% and 21.1%, compared to 19.3% and 20.1%, respectively, for the same comparable periods in 2020, which increased principally due to the addition of AC and DC capacity and improved performance by their plants, including Rooftop portfolio. Our Plant Load Factor (“PLF”), excluding rooftop portfolio, for the quarter and nine months ended December 31, 2021, was 20.5% and 22.0% respectively.

Azure Power commissioned 313 MWs AC during the three months ended December 31, 2021, and 533 MWs AC during the nine months ended December 31, 2021, against 153 MWs AC (236 MWs DC) during the comparative three months and 179 MWs AC (264 MWs DC) during the nine months ended December 31, 2020.

Project cost per megawatt operating (megawatt capacity per the PPA or AC) consists of costs incurred for one megawatt of newly commissioned solar power plant capacity during the reporting period. The project cost per megawatt (DC) operating for the nine months ended December 31, 2021, was Rs 3.39 crore (US$ 0.46 million), compared to Rs 3.12 crore for the nine months ended December 31, 2020. The project cost per megawatt (AC) operating for the nine months ended December 31, 2021, was Rs  3.59 million (US$ 0.48 million), compared to Rs 4.5 crore, for the nine months ended December 31, 2020. Excluding the impact of safeguard duties, the DC and the AC costs per megawatt for the nine months ended December 31, 2021, would have been lower by approximately Rs 20 lakhs (US$ 0.03 million) and Rs 21 lakhs (US$ 0.03 million), respectively, and for the nine months ended December 31, 2020, the DC and the AC costs per megawatt would have been lower by approximately Rs 26 lakhs and Rs  27 lakhs, respectively

Megawatts Operating and Megawatts Contracted & Awarded

Azure Power measures the rated capacity of its plants in megawatts. Rated capacity is the expected maximum output that a solar power plant can produce without exceeding its design limits.

“Megawatts Operating” represents the aggregate cumulative megawatts rated capacity of solar power plants that are commissioned and operational as of the reporting date.

“Megawatts Contracted & Awarded“ represents the aggregate megawatt rated capacity of solar power plants pursuant to customer PPAs signed, allotted or won in an auction but not commissioned and operational as of the reporting date.

As of December 31, 2021, Azure Power’s Operating, Contracted & Awarded megawatts were 7,425 MWs. Contracted & Awarded megawatts included 1,537 MWs for which we had received LOAs but the PPAs had not been signed as of December 31, 2021. There was an increase of 470 MWs compared to prior comparable period. The Company has received letter of awards (LOA), for its first 120 MWs wind project and 150 MWs solar – wind hybrid project from Solar Energy Corporation of India (SECI) and 200 MWs solar – wind hybrid project from Maharashtra State Electricity Distribution Company Limited (MSEDCL). During the quarter, it signed PPAs for 600 MWs and 2,333 MWs with SECI at a fixed tariff of INR 2.54 per kWh and INR 2.42 per kWh, respectively, for supply power for 25 years, as a part of 4,000 MWs manufacturing linked projects.