Rec Limited · NSE:RECLTD
Rec — Q3 & 9M FY19 Earnings Presentation
42 slides from Rec's earnings presentation, February 2019
Slide 1: REC Limited Investor Presentation: Performance Highlights Q3 & 9M FY19
REC Limited (Formerly Rural Electrification Corporation Limited) A Navratna Enterprise of Govt. of India Investor Presentation Performance Highlights Q3 & 9M FY 19 Lighting up lives through composite financial solutions……..
Slide 2: Table of Contents
Table of Contents India - Power Sector – Empowering India REC Overview Operational Performance Asset Quality Borrowing Profile Financial Highlights Disclaimer : • This presentation is for information purposes only and is not to be construed as an offer or invitation or recommendation to buy or sell
Slide 3: India Power Sector Empowering India
India Power Sector Empowering India 3
Slide 4: Generation
Generating Stations 900 Installed Capacity 349 GW Generation Generation Units 2200 PLF 60% Peak Demand 177 GW 4
Slide 5: Transmission
Transmission 7000 Substations Lines 4,05,944 CKM Transmission LINES 100 nos -765KV Transformation Capacity >1300 nos –400KV 8,25,488 MVA LINES 26 ISTS >3200 nos– 220KV Transmission 10 nos – HVDC Licensees Bipole BtB 5
Slide 6: Annual Per Capita Consumption of Electricity (kwh)
Annual Per Capita Consumption of Electricity (kwh) 1400 * 1200 1122 1149 1075 1010 1000 957 884 914 Per capita Consumption 819 779 World - 2,674 800 717 734 672 Brazil - 2,516 631 600 South Africa - 3,904 China - 4,475 400 Japan - 7,371 Russia - 7,481 200 Singapore - 8,160 USA - 12,071 0 2005- 2006-
Slide 7: Estimated Demand by 2021-22 (MW)
Estimated MW Already 234,169 250,000 achieved Demand by 76% 2021-22 (MW) 200,000 172,381 150,000 100,000 50,000 0 As at 31.12.18 Target 2021-22 Source : CEA 7
Slide 8: Generation Capacity by 2026-27 (GW)
GW Generation 700 619 Capacity by 600 479 2026-27 (GW) 500 400 349 275 264 300 243 223 175 200 74 100 45 51 63 17 7 10 0 Thermal Nuclear Hydro RES Total As at 31.12.18 2021-22 2026-27 Source : CEA, National Electricity Policy 8
Slide 9: Fund Requirement (Generation) by 2026-27
Rs. Crores 933,839 956,214 1000000 Fund Requirement 900000 (Generation) by 800000 2026-27 700000 600000 542,954 (Rs. Crores) 495,082 500000 400000 291,589 300000 246,127 200000 98,902 89,837 79,706 45,855 100000 0 Thermal Nuclear Hydro RES Total 2019 - 2022 2023 - 2027 Estimated fund requirement for
Slide 10: Transmission Line Capacity by 2021-22 (CKM)
CKM Transmission Line 500,000 470,515 Capacity Already achieved by 2021-22 (CKM) 450,000 86% 405,944 400,000 350,000 300,000 250,000 As at 31.12.2018 Target FY 21-22 Source : CEA 10
Slide 11: Renewable Energy in India
Renewable Energy in India Sources Potential (%) Potential (GW) Installed Installed Target Expected 2027 Particulars Capacity Capacity Wind Power (Onshore) 11% 103 2022 (NEP) 31.03.2018 31.12.2018 Solar 83% 749 Small Hydro 2% 20 Solar >1 MW 21,651 25,212 100,000 57% 1,50,000 55% Biomass /Bagasse 3% 2
Slide 12: Distribution Modernization by 2019
Present By March 2019 AT & C Loss Below 15% Distribution 20.92% * Modernization by 2019 Gap ACS -ARR Zero Rs.0.34/U* 24X7 Power Supply Power for All Does not include data of Mizoram, Nagaland, Andaman and Nicobar Islands, 19.9 Hrs Lakshadweep * Source : https://www.uday.gov.in 12
Slide 13: SAUBHAGYA
SAUBHAGYA Universal access to Quality Power for All Overview W.e.f 11th October 2017, Govt. of India launched Rs. 16,350 crores household electrification scheme named Pradhan Mantri Sahaj Bijli Har Ghar Yojana (translated as the Prime Minister’s Programme to provide easy electricity access to all ho
Slide 14: REC Overview
REC Overview 14
Slide 15: Key Strengths
Unique and close relationship with all Occupies Strategic major players – Position in the Growth Public & Private - in and development of Indian Power sector the Power Sector across India Experienced Management Team With Nodal Agency for Sector providing 24x7 Expertise quality power to all 600,000 v
Slide 16: Major Milestones in Long & Successful journey of nearly 50 years
• Dec’18: CPSE ETF FFO, GOI holding reduced to 52.85% • Jun’ 2018: “Bharat 22” ETF FFO, GOI holding reduced to 57.99% • Jun’ 2018: Migrated to Ind-AS 2018 Major Milestones in Long & • 2017: “Bharat 22” ETF GOI holding reduced 2018 to 58.32% Successful journey of more • Appointed as the nodal agency
Slide 17: Board of Directors
Board of Directors Experienced Team with sector experience Was Principal Finance Secretary / Additional Chief Secretary and Development Commissioner to Government of Andhra Pradesh for five years. Dr. P.V. Ramesh, IAS Substantial expertise & experience in development assistance management (Governmen
Slide 18: Board of Directors
Board of Directors Experienced Team with sector experience Mr. Sanjeev Kumar Gupta Extensive experience in Design & Engineering, planning & implementation & induction of new Director (Technical) technologies in power transmission projects. > 34 years experience BE (Electrical) from G.B. Pant Univers
Slide 19: Board of Directors
Board of Directors Experienced Team with sector experience Professor T.T. Ram Mohan Specializes in financial sector. Previously, Divisional Manager with Tata Economic Consultancy Independent Director Services. Carried out policy studies for Govt and international agencies and consulting Professor of
Slide 20: Board of Directors
Board of Directors Experienced Team with sector experience Ms. Asha Swarup Has served as Secretary Ministry of I&B, Special Secy./ Addl. Secy. & Financial Adviser in the Ministries Independent Director of Commerce and Textiles. Chief Secretary, Principal Secy. in Departments of Finance, Health, Powe
Slide 21: Shareholding Pattern
Shareholding Pattern As at 31.12.2018 As at 30.09.2018 GoI , 57.99 GoI , 52.85 * FPI, 23.52 FPI, 21.66 MFs, 9.94 MFs, 6.33 Others, 1.17 Insurance Others, 1.00 Insurance Cos., 3.36 Individual/ Cos., 3.39 Individual/ HUF, 8.08 Corporates, HUF, 7.71 Corporates, 1.45 1.55 Govt. of India, has divested 5.
Slide 22: Shareholders Outlook
Shareholders Outlook Top 10 Share holders as at December 31, 2018 Dividend Payout as a % of Equity Rank Particulars Shareholding Category Share Capital (%) Consistently high dividend paying company 1 President of India 52.85 POI 125% 2 CPSE ETF 3.16 MUT 96.50% 3 Life Insurance Corporation of India 2
Slide 23: Operational Performance
| ee | far) a © op aa) far) ar zo; B cctl oF ma © iat Performance
Slide 24: Sanctions - Composition
Sanctions - Composition Sector-wise breakup of Sanctions in 9M FY19 3% Project Loans Generation 9MFY19 Renewable 38% 11% vs 9MFY18 STL 4% T&D 47% 12M Q3 9M Discipline-wise FY16 % FY17 % FY 18 % FY 18 % FY 19 % FY 18 % FY 19 % Generation 27,828 43 28,209 34 53,224 49 25,580 65 14,832 52 49,384 52 36,
Slide 25: Disbursements – Composition
Disbursements – Composition Sector-wise breakup of Disbursements in 9M FY19 42% Project Loans STL Generation 9MFY19 8% 29% vs 9MFY18 Renewable 9% Distribution 40% Transmission 14% 12M Q3 9M Discipline-wise FY 16 % FY 17 % FY18 % FY 18 % FY 19 % FY 18 % FY 19 % Generation 12,820 27 21,697 37 18,086 2
Slide 26: Outstanding Loans – Composition
Outstanding Loans – Composition State STL Generation 81% 1% 41% Customer-wise Category-wise breakup Renewable breakup of of Loans as at Energy Loans as at 8% 31.12.2018 31.12.2018 Joint 7% Distribution Private Transmission 12% 32% 18% 12M Q3 & 9M Discipline-wise FY 16 FY 17 FY18 FY19 Amt % Amt % Amt
Slide 27: Outstanding Loans - Asset Diversification
J&K Haryana 250 6,133 Figures in Rs. Crores Himachal 786 Assam 305 Punjab Uttarakhand Arunachal 7,931 2,327 14 Outstanding Loans - UP 24,587 Sikkim 5,059 Asset Diversification Rajasthan 29,537 Bihar 11,756 PAN India Presence with loan concentration across Nagaland 28 states and 1 Union Territory 96
Slide 28: Outstanding Loans – Loan Concentration
Outstanding Loans –Loan Concentration Major Borrowers (as on December 31, 2018) Amount % of Total Loan S.No. Top Ten Borrowers Outstanding Assets (Rs Cr.) 1 Maharashtra State Electricity Distribution Company Limited 19,918 7.40% 2 Tamil Nadu Generation and Distribution Corporation 13,841 5.14% 3 Raj
Slide 29: Asset Quality
Asset Quality 29
Slide 30: Asset Quality & Provision Coverage
Asset Quality & Provision Coverage As at December 31, 2018 Figures : Rs. Crores Utility Total Loan Credit Impaired Assets (NPAs) Standard Assets Total Outstanding (Stage – III) (Stage – I & II) Provision Outstanding Provision Provision Outstanding Provision Provision * coverage ratio (%) coverage ra
Slide 31: Borrowing Profile
Borrowing Profile National Ratings “AAA” “AAA” “AAA” “AAA” International Ratings “BBB - ” “Baa3” 31
Slide 32: Outstanding Borrowings
Outstanding Borrowings Rs. Crores 12M Q3 & 9M Particulars FY 16 FY 17 FY 18 FY 19 Institutional, Subordinate 109,678 113,449 128,871 132,389 & Zero Coupon Bonds Foreign Currency Borrowings 21,924 21,081 25,996 31,086 FCNR (B) Loans - - 3,811 6,078 Capital Gain Bonds 17,164 19,477 23,705 23,931 Tax F
Slide 33: Outstanding Borrowings
Outstanding Borrowings Total Borrowings (Rs. Cr.) 1,69,106 1,67,517 1,98,791 2,27,192 % age 100% 7.6 7.6 6.4 5.6 1.6 3.0 90% 3.3 1.9 2.7 12.6 13.0 13.1 13.7 80% 0.4 1.1 0.2 70% 11.6 6.3 10.1 11.9 10.5 60% 50% 40% 64.9 67.8 64.7 30% 58.2 20% 10% 0% 2016 2017 2018 9M 2019 Taxable Bonds 54EC Bonds Bank
Slide 34: Funds Raised During The Period
Funds Raised During The Period Rs. Crores 12M Q3 9M Category FY16 FY17 FY18 FY18 FY19 FY18 FY19 (A) Long Term Capital Gains Bonds 6,477 7,663 9,565 2,016 1,554 5,428 4,453 Tax Free Bonds 1,000 - - - - - - Institutional Bonds/ Subordinate Debt 15,526 18,600 26,145 10,120 9,849 16,425 14,849 Term Loan
Slide 35: Funds Raised During The Period (Long Term)
Funds Raised During The Period (Long Term) Total Funds raised 31,255 28,495 47,406 44,253 (Rs. Cr.) % age 100% 7.8 90% 24.7 26.4 31.6 80% 26.9 70% 20.2 60% 20.7 24.8 50% 40% 10.1 65.3 30% 55.2 49.7 20% 33.6 10% 0% 2016 2017 2018 9M 2019 Taxable Bonds 54EC Bonds ECB Banks/ FIs etc. Tax Free Bonds 35
Slide 36: Financial Highlights
ameat RE ndless energy. infinite possibilities. Financial Highlights
Slide 37: Key Financial Highlights
Key Financial Highlights Total Income for 9M FY19 and Q3 FY19 stands at Rs. 19,111 crores (up 14% Y-o-Y) and Rs. 7,252 crores (up 29% Y-o-Y) respectively. PAT for 9M FY19 and Q3 FY19 stands at Rs. 4,508 crores (up 26% Y-o-Y) and Rs. 1275 crores (up 16% Y-o-Y) respectively. Loan book as at 9M FY19 st
Slide 38: Standalone Statement of Profit & Loss
Standalone Statement of Profit & Loss Rs. Crores Q3 9M Particulars FY 18 FY 19 FY 18 FY 19 Interest Income 5,479 6,567 16,337 18,234 Less: Finance Costs 3,291 4,089 9,731 11,501 Net Interest Income 2,188 2,478 6,606 6,733 Other Operating Income 152 685 447 877 Other Income 6 5 8 20 Total Income 5,63
Slide 39: Statement of Assets and Liabilities
Statement of Assets and Liabilities Rs. Crores Particulars As at 31.12.2018 Assets (A) Financial Assets 276,729 Cash and Bank 2,460 Derivative financial instruments 2,250 Loans 258,379 Investments 2,564 Other financial assets 11,076 (B) Non-Financial Assets 2,737.00 Current tax assets (net) 0 Deferr
Slide 40: Key Ratios
Key Ratios Particulars Q3 9M FY 18 FY 19 FY 19 Yield on Interest bearing Loan Assets (%) 10.73 11.05 10.51 Cost of Funds (%) 7.36 7.65 7.20 Interest Spread (%) 3.37 3.40 3.31 Net Interest Margin (%) 4.29 4.25 3.93 Return on Net Worth (%) 13.31 14.97 17.77 Interest Coverage Ratio (Times) 1.46 1.45 1.
Slide 41: Reconciliation of Net Profit for quarter and 9M ended December 31, 2017
Reconciliation of Net Profit for quarter and 9M ended on December 31, 2017 Rs. Crores Particulars Q3 FY18 9M FY18 Profit under IGAAP for the period 1,296 3,812 Adjustments under Ind AS : Adjustment on account of Expected Credit Loss 111 -237 Adjustment on account of MTM accounting for derivatives -4
Slide 42: Thank You
Thank You 42