Ntpc Limited · NSE:NTPC
Ntpc — 3rd Analysts & Investors Meet 2007
53 slides from Ntpc's conference presentation, Aug 1, 2007
Slide 1: A Presentation on NTPC Limited
A Presentation on NTPC Limited by Mr. A.K. Singhal Director (Finance), NTPC at 3rd Analysts & Investors Meet 1st- 2nd August 2007 1
Slide 2: Forward-looking statements disclaimer
The information contained in this presentation contains forward looking statements. Actual result may vary materially from those expressed or implied, depending upon economic conditions, government policies and other factors. Any opinion expressed is given in good faith but is subject to change with
Slide 3: Corporate vision and Core Values
Corporate vision and Core Values Corporate Vision: “A world class integrated power major, powering India’s growth, with increasing global presence” Core Values: B-Business Ethics C-Customer Focus O-Organizational & Professional pride M-Mutual Respect and Trust I- Innovation & Speed T-Total quality f
Slide 4: Contents
Contents 1 About Us 2 Business opportunities 3 NTPC’s business and strengths 4 Performance Highlights – Year and Q1-08 5 Challenges and Strategies 4
Slide 5: Evolution of NTPC
Evolution of NTPC 1975 1997 2004 2005 2007 NTPC was set up in Government of India NTPC became a Rechristened as First step towards 1975 with 100% granted NTPC status of listed company with NTPC Limited in line strategic ownership by the “Navratna’ being one of majority Government with its changing d
Slide 6: NTPC - Today
NTPC- Today Government owns 89.5% Ownership FIIs own 6.94 % and rest 3.56 % owned by domestic institutions & public One of the four largest Indian companies with a market cap of more than Rs. 1300 billion + Size Has a net worth of Rs.485.9 billion + Owns total assets of Rs.807.6 billion + The larges
Slide 7: NTPC group
NTPC group 5 Subsidiaries 8 Joint Ventures - NTPC Electric Supply Company Ltd. – PTC India Ltd. (8%) (100%) – Utility Powertech Ltd. (50%) – NTPC Vidyut Vyapar Nigam Ltd. (100%) – NTPC SAIL Power Co. (Pvt.) Ltd. (50%) – N TPC Hydro Ltd.(100%) – Pipavav Power Development Company Ltd – NTPC Alstom Pow
Slide 8: Accomplishments & Accolades
Accomplishments & Accolades GOLDEN PEACOCK GLOBAL AWARD FOR ASIAN POWER PLANT OF THE YEAR AWARD 2006 CORPORATE SOCIAL RESPONSIBILITY 2007 BY BY ASIAN POWER MAGAZINE TO FEROZE WORLD COUNCIL FOR CORPORATE GOVERNANCE, GANDHI UNCHAHAR TPS ON ITS ATTRIBUTES OF LONDON, UK. EFFICIENCY, ENVIRONMENT, OPERATI
Slide 9: Contents
Contents 1 About Us 2 Business opportunities 3 NTPC’s business and strengths 4 Performance Highlights – Year and Q1-08 5 Challenges and Strategies 9
Slide 10: Economy at an inflexion point
Economy at an inflexion point The GDP grew at 9.4% during fiscal 2007, average rate of growth over last 4 years is 8.6%. The current growth is consumer-led and hence expected to take the economy to even higher growth path. GDP growth target of 9% set by Govt. during XI Plan. The growth in electricit
Slide 11: Power Sector Overview
Power Sector Overview 693 9.9% 631 591 8.3% 624 ment re equi R 559 7.3% 546 579 y 523 7.1% bilit 507 548 ila 8.8% a Av 7.5% 519 7.8% 498 483 467 Supply Deficit Power Market – offers huge growth opportunities 11
Slide 12: Power Sector Overview – Per capita Consumption
Power Sector Overview – Per capita Consumption 18329 20000 P e r C a p ita E le c tr ic ity C o n s u m p tio n 18000 14,057 16000 11,446 14000 8,212 12000 [K W H r] 7,258 10000 6,755 8000 631 Kwh 6000 2,490 2,246 631 in 2006 1,440 4000 1,340 594 2000 0 Canada World Japan Australia Brazil Egypt Indi
Slide 13: Existing Generating Capacity - March'07
Existing Generating Capacity-March’07 Fuelwise break-up Sector wise break-up Thermal 86,015 65.0% 70,096 MW 17,113 MW Hydro 34,654 26.2% Nuclear 3,900 2.9% Renewable 7760 5.9% TOTAL 132, 329 100.0% (Excluding captive capacity of 14363 MW connected to grid) 45,120 MW Total Generation fiscal 2007 : 65
Slide 14: XI plan target 2007-2012
XI plan target-2007-2012 Thermal Total Sector Hydro Nuclear Total Thermal Coal Lignite Gas Central 24310 1000 1454 26800 9685 3380 39865 sector State Sector 23135 450 762 24347 3605 0 27952 Private 5460 0 2037 7497 3263 0 10760 Sector Total 52905 1450 4289 58644 16553 3380 78577 NTPC to contribute t
Slide 15: Projected Capacity
Projected Capacity 778 GW 425 GW 220 GW 132 GW 2007 2012 2022 2032 Source: Integrated Energy Policy GOI 15
Slide 16: Contents
Contents 1 About Us 2 Business opportunities 3 NTPC’s business and strengths 4 Challenges and Strategies 5 Performance Highlights – Year and Q1-08 6 Growth strategies 16
Slide 17: Business strength - Spread across the country
Business strength-Spread across the country Region No of plants Capacity MW NTPC Owned KOLDAM KOLDAM (800 (800 MW) MW) LOHARINAG LOHARINAG PALA (600 (600 MW)MW) PALA Coal 15 22895 RUPSIABAGAR RUPSIABAGAR KHASIABARA KHASIABARA DADRI DADRI (817 (817 MW) MW) (260MW) (260MW) LATA TAPOVAN LATA TAPOVAN Ga
Slide 18: Business strengths - Dominant Market Share
Business strengths- Dominant Market Share (as of March 31, 2007) Capacity (MW) Generation (BUs) NTPC 27404 NTPC 21% 189 29% Rest Rest 470 104925 71% 79% More than one-fourth of India’s generation with one-fifth capacity The next largest power utility owns 7.5% of market share in terms of capacity an
Slide 19: Business strength - Consistent Growth
Business strength- Consistent Growth Capacity (MW) Generation (Billion Units) 26350 189 3% 9% –2 - 1 N N O I O I PT PT E CE C N IN I CE CE N SI N SI R R 19435 G G CA CA 130 •Capacity – NTPC CAGR since inception 20% Vs All India 5.3% •Generation – NTPC CAGR since inception 23.4% Vs All India 6.7%. 19
Slide 20: Business strength – Operational efficiency
Business strength – Operational efficiency Operations Management Consistently efficient Commissioning R&M NTPC 89 88 88 84 84 81 Rest Safety 70 72 NTPC 66 69 69 69 Operation Station Operation Components NTPC PLF Vs Average PLF of Environment Other generators in India Maintenance Fuel Efficiency 2001
Slide 21: Commercially attractive source of power
Business strength – Commercially attractive source of power Average selling price is Rs. 1.75 per unit in fiscal 2007 Supply decisions based on commercial principles Allocation of power to customers with ability to pay Flexibility to reduce sale to defaulting Customers Energy sale assured through lo
Slide 22: Commercially attractive source of power contd.
Business strength – Commercially attractive source … contd. 100% realization for Four years in succession. Same trend continues in the first quarter of fiscal 08 Letters of Credits to the extent of 105% of average monthly billing established by all customers Timely Servicing of Bonds under One-time-
Slide 23: Proven Competencies & skills
Business strength -Proven Competencies & skills Project implementation skills Turnaround capabilities (No. of Months) 70 Reducing project completion time 60 59 Unchahar Plant PLF 50 50 120 95.6 40 39 39 100 36 80 30 60 % 20 40 18.0 10 20 0 0 Singrauli (1988) Vindhyachal (1999) Simhadri (2002) Talche
Slide 24: Business strength - Human Resources
Business strength - Human Resources Improving Productivity 24,375 highly trained employees Senior executives possess extensive experience of the industry MU Executive Turnover Rate 1.19% 10.0 Generation per Employee 7.99 8.0 Planned interventions at various stages of career 6.0 4.1 Systematic traini
Slide 25: Leveraging NTPC's capabilities for growth of power sector
Business strength – Leveraging NTPC’s capabilities for growth of power sector Under Partnership In Excellence (PIE), 2833 million units added during fiscal 2007. This amounts to capacity addition of 430 MW at 75% PLF. Decentralised Distributed Generation (DDG) projects commissioned at six villages i
Slide 26: Sound corporate governance practices
Business strength -Sound corporate governance practices Management oversight through various committees of the Board Committee on Committee for Committee For Audit Committee Management Controls Projects Contracts Comprises of only Approvals for Independent Directors Review and monitoring Award of co
Slide 27: Systems based managerial practices
Business Strength – Systems based managerial practices Project Operations Management Safety Management Management System Integrated project Maintenance management and management system Control system Financial Efficiency Management Management Engineering System Systems Systems Fuel Management Contra
Slide 28: Strong Credit Ratings
Business strength - Strong Credit Ratings Standard & Poor’s : BBB- (Stable outlook) Fitch : BBB- (Stable outlook ) S&P “For NTPC the rating reflects the stand-alone credit profile of the company and its dominant market share in the electricity generation sector” “NTPC’s rating reflects the dominant
Slide 29: Contents
Contents 1 About Us 2 Business opportunities 3 NTPC’s business and strengths 4 Performance Highlights – Year and Q1-08 5 Challenges and Strategies 29
Slide 30: Performance Highlights – Fiscal 2007 & Q1-08
Performance Highlights – Fiscal 2007 & Q1-08 1 Capacity Growth 2 Physical Performance 3 Commercial Performance 4 Financial Performance 5 Others 30
Slide 31: Capacity Growth
Capacity Growth Capacity added in the previous year -3155 MW 705 MW Badarpur Thermal Station MW transferred to NTPC w.e.f. June 1, 2006 26850 1000 MW commissioned at Vindhyachal 26350 500 MW commissioned at Kahalgaon 210 MW commissioned at Unchahar 740 MW capacity of Ratnagiri JV 23935 23435 Increas
Slide 32: Physical Performance – Generation & Capacity utilization
Physical Performance –Generation & Capacity utilization PLF PLF -- Quarter Quarter and and Year Year Generation Generation –– Quarter Quarter and and Year Year 2007 2006 200 189 BUs Coal Stations 89.43% 87.54% 180 171 Gas Stations 71.90% 65.81% 160 All India 76.80% 73.60% 140 120 Q1- Q1-08 Q1- Q1-07
Slide 33: Financial Performance – For the Year 2006-07
Financial Performance – For the Year 2006-07 Rs.Million Fiscal 2007 Fiscal 2006 % change Total income 353,807 293,393 20.59% Sale of Energy 325,344 266,564 22.05% Other income 28,463 26,829 6.09% Total expenditure 264,842 224,818 17.80% Fuel 198,181 163,947 20.88% Depreciation 20,754 20,477 1.35% In
Slide 34: Financial Performance – Quarter
Financial Performance – Quarter Rs. Million The total income have grown by Q1-08 Q1-07 19.03% % change Sales have registered an increase Total income 96,878 81,390 19.03 of 19.48% Sale of Energy 89,382 74,808 19.48 Profits have grown by 52.62% Other income 7,496 6,582 13.89 Total expenditure 67,944
Slide 35: Financial Performance – Quarter
Financial Performance – Quarter Rs.Million Q1-08 Q1-07 % As in the past the company has change disclosed certain adjustments which Reported PAT 23699 15528 52.62 % are included in the reported results Adjustments •Previous year sales -5097 -939 On a comparable basis the profits •Exchange rate -3828
Slide 36: Other key highlights (April to July)
Other key highlights (April to July) A joint venture Agreement signed on May 11, 2007 with SCCL for creation of a JVC to undertake various activities in coal and power sector including acquisition of coal/lignite blocks etc. The object clause of MOA was changed May15,2007 to pave way for undertaking
Slide 37: Other key highlights (April to July)…contd.
Other key highlights (April to July)…contd. A 500 MW unit of Vindhyachal stage-III entered commercial generation w.e.f. July 15, 2007 MOU signed with ADB on July 23 to set up a Joint Venture to establish and hold a portfolio of about 500 MW of renewable generation. MOU signed with Rashtriya Ispat Ni
Slide 38: Other key highlights …….. contd.
Other key highlights …….. contd. Coal Supply – During the quarter 29.49million tonnes of coal was received as compared to 26.63 million tonnes in the corresponding quarter in the previous year – Coal stock levels at power stations were comfortable Gas Supply – During the quarter Gas stations receive
Slide 39: Contents
Contents 1 About Us 2 Business opportunities 3 NTPC’s business and strengths 4 Performance Highlights – Year and Q1-08 5 Challenges and Strategies 39
Slide 40: NTPC - evolving as an integrated Power major
NTPC-evolving as an integrated Power major • Globalisation • Hydel Power • Power trading Setting up of power plants ~9,000 MW by 2017 abroad • Power • Nuclear Power International Consultancy Distribution 2000 MW by 2017 • Non-conventional LATERAL FORWARD INTEGRATION INTEGRATION 1000 MW by 2017 BACKW
Slide 41: Global Initiatives
Global Initiatives MoU signed with the Government of Sri Lanka and Ceylon Electricity Board for setting up a 500 MW coal based thermal power plant in Sri Lanka MoU signed with Kyushu Electric Power Co. Inc., Japan for establishing an alliance for exchange of information and experts from different ar
Slide 42: Basis for Strategies – Key Challenges
Basis for Strategies – Key Challenges 1. Rapid capacity expansion 2. Fuel security 3. Regulatory Risk 4. Financial Resources 5. Technological Obsolescence 6. Competition 7. Health of Customers 8. Pollution 9. CSR and Resettlement and Rehabilitation The company has formulated its plans and strategies
Slide 43: Strategy – Rapid capacity expansion
Strategy – Rapid capacity expansion Total Installed capacity envisaged • Multi-pronged Growth Strategy 75000+ (Estimated) • Multi pronged approach to capacity 50000+ addition • Greenfield projects • Brownfield expansion 27904 • Joint ventures / Acquisitions • Diversification in related business area
Slide 44: NTPC by 2017 - A Snapshot
NTPC by 2017 - A Snapshot Present 2011-12 2016-17 Power Generation 27,904 50,004 ~ 75,000 Coal Mining (Production) -- 15 MTPA ~ 47 MTPA Trading (Units Traded) 2.66 BU 10 BU 25 BU Distribution (Capacity) -- 1,000 MW 2,000 MW 44
Slide 45: NTPC by 2017 - A Snapshot contd.
NTPC by 2017 - A Snapshot…contd. JV/subsi Nuclear 5054 2000 Gas, 7% JV 1054 Hydro 3% 3955, 4% 8971 R.E.S. 14% 1000 12% 1% Gas Coal Coal, 8505 22395, 49470 11% 82% 66% Coal Gas JV Coal Gas Hydro JV Nuclear R.E.S Capacity Mix - existing Capacity Mix - 2017 45 (27904 MW) (75000MW)
Slide 46: Fuel security Strategy – Backward integration & diversification
Fuel security Strategy –Backward integration & diversification Strategies for coal sourcing Fuel tie up for required quantities with Coal PSUs – more than 80% of NTPC’s coal based capacity located at /near pit head. Import as and when required Develop coal mines – 7 coal mines including 2 in JV Coal
Slide 47: Status of coal mine development
Status of coal mine development 7 coal blocks allotted of which two would be developed in joint venture with Coal India Limited Estimated mineable reserves of 2900 MT Estimated total production capacity of 47 MTPA by the year 2017 NTPC Board has approved an advance expenditure of Rs. 5430 million fo
Slide 48: Key Challenge – Regulatory Risk
Key Challenge – Regulatory Risk Regulator is expected to ensure reasonability of returns and continue to incentivise efficient operations Tariff Policy is indicative of continuing with a regime of reasonable return for all the utilities in the sector Setting up Merchant Plants 48
Slide 49: Financial Resources Strategy - Prudent Financial policies
Financial Resources Strategy - Prudent Financial policies Capital Diversified sources of funds structure Prudent financial profile - Debt to Net Worth of 0.5:1 Access to large credit lines from financial institutions, Banks, Multilateral and Bilateral agencies Liquidity Net cash flow of Rs.81 bln ge
Slide 50: Technological obsolescence Strategy - Technology Initiatives along with R&D
Technological obsolescence Strategy - Technology Initiatives along with R&D Super critical technology and 765 KV transmission are some of the technologies adopted. The company sets aside upto 0.5% of the profits for R&D Energy Technologies Centre is working in both fundamental and applied fields and
Slide 51: Key Challenge - Pollution
Key Challenge - Pollution Strategy – Sound environment management Issues Nitrogen Oxide (NOx) and Sulphuric Oxide (SO2) emissions CO2 emissions Emissions of Suspended Particulate Matter (SPM) Ash Management Effluent Management Initiatives Initiatives All stations ISO 14001 certified Clean Developmen
Slide 52: Strategy – Well laid down CSR and R&R Policies
Fulfillment of CSR and R&R objectives Strategy – Well laid down CSR and R&R Policies NTPC Foundation formed to address Social issues at national level NTPC has framed Corporate Social Responsibility Guidelines committing up to 0.5% of net profit annually for Community Welfare Measures on perennial b
Slide 53: Power Producer of International Repute
Power Producer of International Repute The largest Indian power utility, NTPC has a vision to be one of the world’s largest and best power utilities, powering India’s growth www.ntpc.co.in 53