Following the insolvency of one of the company’s prime sub-contractor in a particular geography, the company has had to appoint alternate sub-contractor(s) at a higher price due to border restrictions and other impacts arising from the ongoing Covid-19 pandemic. This has also led to an increase in project timelines and consequential overheads which are material in this particular geography, Sterling and Wilson
Solar said in a business update.
The global Solar EPC industry has been impacted off late, with several module manufacturers refusing to honour past price contracts given the sharp increase in the cost of modules. "Some of the company’s module manufactures have also reneged on honouring their contractual commitments and have sought to substantially increase their module prices in two projects. The continued increase in commodity prices and freight costs remain at their all-time high," it said.
The management believes that these recent one-off events would materially impact the costs of the affected projects under execution, impacting margins for the year-end March 31, 2021. The management is taking all steps to minimise the impact of the aforementioned events, the company said.
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