# WINDFORCE PLC Financial Summary

Canonical URL: https://pal.lk/updates/wind-financial-summary
Symbol: WIND.N0000
Company: WINDFORCE PLC
Sector: Utilities
Published: 2026-08-25T18:16:35Z
Last updated: 2026-08-25T18:16:34Z

# WindForce PLC Financial Summary and Investment Analysis

## Executive Overview
WindForce PLC is Sri Lanka's largest Independent Power Producer (IPP) in the renewable energy sector, operating a diversified portfolio across wind, solar, and hydropower. The company commands a 14% market share in Sri Lanka's renewable energy sector and possesses an installed capacity of 253 MW across 31 power plants located in Sri Lanka, Uganda, Pakistan, and Ukraine. Recent expansions include major advancements into floating solar, agrivoltaics, and a pioneering utility-scale Battery Energy Storage System (BESS) network. Despite industry-wide challenges such as grid curtailment and payment delays from the national utility, WindForce has maintained resilient growth, driven by new plant commissioning, strategic geographic diversification, and robust internal operations and maintenance (O&M) capabilities.

**Key periods covered:** Q3 2023 to Q2 2026 (natural calendar quarters, derived from the reporting periods up to June 30, 2026).

## Financial Performance

### Revenue and Profitability Trends

| Period | Revenue (LKR '000) | Gross Profit (LKR '000) | Net Profit/Loss (LKR '000) | GP Margin | NP Margin |
|--------|-------------------|-------------------------|----------------------------|-----------|-----------|
| **Q2 2025** (3M ending Jun 2025) | 2,124,003 | 1,313,366 | 832,274 | 61.8% | 39.2% |
| **12M ending Q1 2025** (Trailing 12M) | 6,902,690 | 4,129,230 | 2,249,690 | 59.8% | 32.6% |
| **12M ending Q1 2026** (Trailing 12M) | 8,040,257 | 4,250,303 | 2,151,236 | 52.9% | 26.8% |
| **Q2 2026** (3M ending Jun 2026) | 2,620,115 | 1,460,368 | 874,606 | 55.7% | 33.4% |

**Analysis:**
*   **Revenue Growth:** Revenue demonstrated strong upward momentum, growing 16.5% year-over-year in the 12 months ending Q1 2026, and a further 23% YoY in Q2 2026. This was driven by capacity additions, including the Hiruras (15 MW) wind plant, Kebitigollewa (10 MW) solar plant, and the Sooryashakthi (10 MW) solar plant, alongside strong expansions in adjacent business streams like EPC, O&M, and the EV automotive segment (Satva Automotive).
*   **Profitability & Margins:** On a reported basis, net profit for the 12 months ending Q1 2026 declined slightly by 4% YoY. This optical drop was due to an elevated base in the prior year, which included significant non-recurring items (LKR 708 million in SPPA arrears billing and LKR 486 million from asset disposals). Normalizing for these one-offs, underlying EBIT increased by 50.1% YoY, and normalized profit after tax increased by 62%.
*   **Curtailment Impact:** Profitability was constrained by grid curtailments imposed by the National System Operator (NSO) to maintain stability during low demand periods, which resulted in a revenue loss of LKR 317 million for the 12 months ending Q1 2026 and an additional LKR 88.6 million in Q2 2026. 

### Balance Sheet Analysis

| Indicator (LKR '000) | 12M ending Q1 2025 | 12M ending Q1 2026 | Q2 2026 (Ending Jun 2026) |
|----------------------|--------------------|--------------------|---------------------------|
| **Total Assets** | 39,424,451 | 44,082,043 | 57,492,176 |
| **Current Assets** | 7,092,144 | 10,885,456 | 17,049,459 |
| **Total Liabilities**| 13,025,179 | 15,106,449 | 25,410,021 |
| **Current Liabilities**| 2,040,837 | 3,900,023 | 2,850,847 |
| **Total Equity** | 26,399,272 | 28,975,595 | 32,082,155 |

**Analysis:**
*   **Asset Growth:** Total assets grew steadily, expanding by 11.7% in the 12 months ending Q1 2026, and jumping significantly by Q2 2026 due to extensive capital investments and a large increase in project advances and trade receivables (up to LKR 9.79 billion in project advances in Q2 2026).
*   **Liquidity:** The current ratio stood at a healthy 2.79x as of Q1 2026 and further expanded to 5.98x in Q2 2026. However, working capital management faces pressure due to prolonged receivable days (increasing from 46 days to 70 days by Q1 2026) caused by delayed settlements from the national utility.
*   **Solvency:** Gearing remains conservative. Gross gearing was 30.52% as of Q1 2026, heavily skewed toward project-specific, long-term debt, mitigating refinancing risks.

### Cash Flow Analysis

| Cash Flow (LKR '000) | 12M ending Q1 2025 | 12M ending Q1 2026 | Q2 2026 (3M ending Jun 2026) |
|----------------------|--------------------|--------------------|------------------------------|
| **Operating (OCF)** | 3,139,323 | 1,519,036 | (6,820,472) |
| **Investing (ICF)** | (929,357) | (2,412,189) | (2,893,509) |
| **Financing (FCF)** | (2,724,009) | 1,801,725 | 9,798,281 |
| **Net Change in Cash**| (514,043) | 908,573 | 98,570 |

**Analysis:**
*   **Operating Cash Flow:** OCF dropped significantly in the 12M ending Q1 2026 and turned heavily negative in Q2 2026. This was driven primarily by a massive working capital absorption, specifically an LKR 8.68 billion increase in trade and other receivables in Q2 2026, linked to delayed NSO payments and project-related prepayments.
*   **Investing & Financing:** The company is in a heavy CAPEX phase, reflected in soaring ICF outflows for property, plant, and equipment (LKR 2.41 billion in 12M ending Q1 2026; LKR 7.56 billion in Q2 2026 alone). This expansion is actively funded by new debt facilities, generating high financing cash inflows, including a major USD 18 million IFC loan facility.

## Key Financial Ratios and Growth Indicators

| Metric | 12M ending Q1 2025 | 12M ending Q1 2026 | Q2 2026 (Trailing 12M equivalent / Point-in-time) |
|--------|--------------------|--------------------|---------------------------------------------------|
| **Return on Assets (ROA)** | 5.71% | 4.88% | - |
| **Return on Capital Employed (ROCE)** | 8.16% | 6.60% | - |
| **Earnings Per Share (EPS) (LKR)** | 1.32 | 1.14 | 0.56 (Quarterly) |
| **Net Asset Value Per Share (LKR)**| 17.22 | 18.75 | 19.30 |
| **P/E Ratio** | 18.90x | 39.51x | - |

*   **Growth Indicators:** A strategic push into Battery Energy Storage Systems (BESS) with 13 secured locations (130 MW / 520 MWh capacity) represents a massive growth catalyst. Floating solar (Diya Janani 5 MW) and agrivoltaic dual-use lands enhance resource efficiency.
*   **Valuation:** The P/E ratio doubled from 18.9x to 39.5x by Q1 2026, indicating that the market is pricing in the high future growth potential of the 300+ MW project pipeline rather than current trailing earnings.

## Economic and Market Context
*   **Macro Environment:** Sri Lanka is undergoing a macroeconomic turnaround with stable fundamentals and declining interest rates, facilitating easier access to domestic and foreign capital (e.g., IFC and World Bank).
*   **Industry Tailwinds:** The government aims to generate 70% of electricity from renewable sources by 2030. The new Sri Lanka Electricity Act No. 36 of 2024 unbundles the Ceylon Electricity Board (CEB) into a National System Operator (NSO), allowing independent producers to form direct Power Purchase Agreements (PPAs) in a newly liberalizing market.
*   **Grid Constraints:** The national grid's current inability to absorb peak variable renewable generation has led to industry-wide weekend curtailments. WindForce's BESS investments are a direct strategic response to this bottleneck.

## Future Potential and Outlook
*   **Pipeline Expansion:** The company's pipeline is set to more than double its current installed capacity from 253 MW to 548 MW. Key projects include the 100 MW Rividhanavi Solar Project (target completion Aug 2027), the 10 MW Safe Power Wind Project (target May 2027), and the 13 BESS projects.
*   **International Footprint:** Offshore revenue currently contributes ~13%. WindForce aims to expand further into African markets (Sierra Leone, Zambia, Uganda, Mozambique) backed by multilateral financing.
*   **New Revenue Streams:** The company is transforming its in-house technical capabilities into a standalone commercial O&M and EPC business, offering turbine repair (crane-less technology) and proprietary IoT-enabled SCADA integration to third parties.

## Risks and Challenges
*   **Liquidity and Counterparty Risk:** High dependency on a single buyer (the state-owned NSO/CEB). Delayed payments have stretched receivable days, pressuring operating cash flows.
*   **Climate and Weather Volatility:** Over-reliance on natural elements causes fluctuating generation. For example, Q3/Q4 2024 saw reduced hydro output due to low rainfall, while subsequent quarters saw high rainfall but low wind speeds. 
*   **Infrastructure Limitations:** Grid curtailment due to inadequate national transmission capabilities directly harms revenue (e.g., LKR 317m lost in 12M to Q1 2026).
*   **Supply Chain & FX:** Dependence on imported components (solar panels, turbines) exposes the company to global trade bottlenecks and currency depreciation. A force majeure was declared for the Safe Power project due to Cyclone Ditwah destroying transport infrastructure.
*   **Mitigations:** Diversification across wind, solar, and hydro smooths out seasonal resource dips. Investment in BESS will mitigate curtailment. USD-pegged PPAs for overseas projects hedge currency risks.

## Shareholder and Corporate Information
*   **Major Shareholders:** Akbar Brothers (Pvt) Ltd (36.38%), Hirdaramani Private Limited (20.62%), Mona Exports (9.35%).
*   **Foreign Holding:** Foreign holding trended downward recently, moving from 9.83% to 8.11% in the 90 days preceding August 2026.
*   **Market Data:** Share price gained ~80% YoY to LKR 45.00 by Q1 2026, slightly retracting to LKR 40.80 by Q2 2026. Market Capitalization reached LKR 60.9 Billion in Q1 2026.
*   **Dividends:** The company paid a dividend of LKR 1.00 per share in the year ending Q1 2025, but strategically paused dividends in the year ending Q1 2026 to reinvest retained earnings into its massive capacity expansion pipeline.

## Investment Decision Indicators

**Strengths:**
*   Market leader (14% share) in Sri Lanka's high-growth renewable sector.
*   Highly diversified portfolio (Solar, Wind, Hydro, EV/BESS) across multiple geographies.
*   Strong in-house EPC and O&M expertise, boasting ~97% plant availability and generating major cost savings.
*   Guaranteed long-term (typically 20-year) PPAs provide high revenue visibility.

**Weaknesses:**
*   Severe short-term negative operating cash flow caused by national utility payment lags and heavy prepayment for pipeline projects.
*   Optical margin compression due to the expiration of early-tier higher tariffs on aging wind plants (e.g., Joule and Beta).

**Opportunities:**
*   First-mover advantage in the utility-scale BESS market (130 MW/520 MWh), unlocking grid-balancing revenues.
*   New electricity market liberalization enables direct corporate PPAs, bypassing state-utility bottlenecks.
*   Repowering of aging wind farms with higher-capacity, modern turbines.

**Threats:**
*   Prolonged national grid infrastructure deficits leading to sustained energy curtailment.
*   Geopolitical supply chain disruptions increasing the CAPEX of new projects.

**Overall Assessment:** 
*   **Hold / Accumulate Rationale:** For investors focused on long-term capital appreciation, WindForce presents a strong infrastructure play. The recent suspension of the dividend and deeply negative short-term operating cash flows make it less suitable for immediate income seekers. However, the aggressive re-investment into a pipeline that will double its capacity (from 253 MW to 548 MW)—coupled with securing vital BESS infrastructure and prestigious backing from the IFC—positions the company for massive revenue scaling from 2027 onwards. The temporary optical drops in profit margins primarily reflect normalized comparatives rather than a breakdown in core unit economics.