December 2016 witnessed the sad passing away of the Tamil Nadu Chief Minister, Ms Jayalalithaa Jayaram. Given Ms Jayalalithaa's immense popularity, commercial activity in Tamil Nadu was understandably at a low ebb for about a week just after her passing. Shortly thereafter, Cyclone Vardah hit the northern parts of the state. This cyclone caused only minor damage at the plant, which was quickly returned to near full availability, but it severely impacted regional transmission infrastructure as well as commercial activity. As the transmission system is being restored and commercial activity for our customers is returning to normal, the Chennai plant too is gradually resuming full service with load factors expected to normalise from February 2017.
Taking the impact of these events together, the Board has refined its expectations for the Chennai plant to achieve a reportable load factor of approximately 76% for FY17 as a whole, compared with the expectation indicated at the time of the Company's half year results of around 80%. This corresponds to a reduction in revenue estimates of around £5-6m.
The Directors believe that the Group's modular assets, capex planning, gearing levels, dual location and highly diversified customer base enable the Group to manage the impact of such unforeseen events. In addition, the pursuit of a group captive business model has served to cushion against such unfortunate instances. The Board remains confident about the Group's prospects.