Godawari Power & Ispat Ltd. · NSE:GPIL
Godawari Power & Ispat — Q3 FY2019 Earnings Presentation
37 slides from Godawari Power & Ispat's earnings presentation, Feb 4, 2019
Slide 1: Stock exchange cover letter for corporate presentation
--H1RA--- GODAWARI POWER & ISPAT REF: GPILINSE&BSE/2019/3711 Date: 04.02.2019 To, I. The Listing Department, 2. The Corporate Relation Department, The National Stock Exchange Limited, The Stock Exchange, Mumbai, Exchange Plaza, Bandra Kurla Complex, 151 Floor, Rotunda Building, Bandra (E), MUMBAT- 4
Slide 2: Q3FY19 Earnings Presentation
Q3FY19 Earnings Presentation February 2019
Slide 3: Disclaimer
Disclaimer This presentation and the accompanying slides (the “Presentation”), which have been prepared by Godawari Power and Ispat Limited (the “Company”) solely for the information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securities, a
Slide 4: Delivering Strong Quarterly Results: Reiterating strong performance
Delivering Strong Quarterly Results : Reiterating strong performance Q3FY19 Operational Highlights* Production Quantity* Iron Ore mine production at 387,757 MT In MT Q3FY19 Q3FY18 Change % Pellet production 2% higher at 621,818 MT Minning 387,757 419,673 -8% Sponge Iron production 8% higher at
Slide 5: Updates
Updates Merger of Jagdamba Power with GPIL • Proposed merger with Jagdamba Power & Alloys Limited (JPAL) into GPIL called off due to non- approval of merger proposal by JPAL Shareholders whereas GPIL Shareholders approved the merger resolution. • Proposed merger of JPAL into GPIL unapproved due to n
Slide 6: Q3FY19 Production and Sales Summary
Q3FY19 Production and Sales Summary Quarterly Production (in MT) Q3FY19 Q2FY19 QoQ (%) Q3FY18 YoY (%) Iron ore Mining 387,657 305,207 27% 419,673 -8% Iron ore Pellets - GPIL 435,300 512,050 -15% 462,900 -6% Iron Ore Pellets - ASL 186,518 128,329 45% 145,282 28% Sponge Iron 112,759 111,229 1% 104,386
Slide 7: GPIL Consolidated - Profit & Loss
GPIL Consolidated - Profit & Loss Particulars (in Million) Q3FY19 Q2FY19 QoQ (%) Q3FY18 YoY (%) Net Sales 9,028 8,044 12% 6,721 34% Total Expenses 6,893 6,000 15% 5,034 37% Other Income 11 10 8% 6 91% EBITDA 2,146 2,054 4% 1,693 27% EBITDA Margin (%) 24% 26% -7% 25% -6% Depreciation 327 336 -3% 328
Slide 8: GPIL Standalone - Profit & Loss
GPIL Standalone - Profit & Loss Particulars (in Million) Q3FY19 Q2FY19 QoQ (%) Q3FY18 YoY (%) Net Sales 7,533 7,125 6% 5,737 31% Total Expenses 6,061 5,458 11% 4,494 35% Other Income 8 7 17% 4 93% EBITDA 1,480 1,674 -12% 1,247 19% EBITDA Margin (%) 20% 23% -16% 22% -10% Depreciation 225 230 -2% 223
Slide 9: Ardent Steel Limited Standalone - Profit & Loss
Ardent Steel Limited Standalone- Profit & Loss Particulars (in Million) Q3FY19 Q2FY19 QoQ (%) Q3FY18 YoY (%) Net Sales 1,257 713 76% 725 173% Total Expenses 779 505 54% 495 157% Other Income 0 0 0% 1 8% EBITDA 478 209 129% 231 207% EBITDA Margin (%) 38% 29% 30% 32% 119% Depreciation 28 29 -2% 28 99%
Slide 10: Godawari Green Energy Limited - Profit & Loss
Godawari Green Energy Limited - Profit & Loss Particulars (in Million) Q3FY19 Q2FY19 Q3FY18 Net Sales 238 210 259 Total Expenses 52 42 45 Other Income 3 3 3 EBITDA 189 171 218 EBITDA Margin (%) 79% 82% 84% Depreciation 74 78 77 Finance Costs 138 130 140 PBT -23 -37 1 Tax -7 -12 1 PAT -16 -25 0 9
Slide 11: Pellet Price Outlook in Domestic Market
Pellet Price Outlook in Domestic Market • Vale – one of the world’s largest iron ore producer reports a supply disruption of 10-11 mnt pellets production and 40 mnt iron ore production annually due to the de-commissioning of dam. The de-commissioning of dams is expected to take place over a period o
Slide 12: Outlook on Global Steel Demand
Outlook on Global Steel Demand 2-4% CAGR (Million Tonnes) 2000 1764 1800 1648 1680 1622 1600 1534 1547 1515 1499 1415 1444 1400 1200 113 88 93 65 74 77 1000 74 82 84 71 800 600 400 763 780 784 792 735 711 672 681 641 660 200 0 2011 2012 2013 2014 2015 2016 2017E 2018P 2019P 2022P China US EU Japan I
Slide 13: Domestic Demand Outlook
Domestic Demand Outlook (Million Tonnes) 120 3.4% CAGR 6-6.5% CAGR 7.5% 8.0% 6.9% 7.0% 100 5.9% 5.5% 6.0% 5.0% 80 5.0% 3.9% 60 3.5% 4.0% 2.9% 3.0% 40 2.0% 20 0.8% 1.0% 0 0.0% 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18E 2018-19P 2021-22P Source : CRISIL Research, JPC Steel Consumption Yo
Slide 14: Corporate Presentation
HIRA- GODAWARI POWER & ISPAT CORPORATE PRESENTATION
Slide 15: Integrated Asset Portfolio; Unique Presence Across Steel Value Chain
Integrated Asset Portfolio; Unique Presence Across Steel Value Chain Asset Capacity FY 18 Utilisation Asset Capacity FY18 Utilisation Iron Ore MS 0.2 mt 2.1 mt Mining 79% Rounds 78% HB 0.15 mt Iron Ore 2.7 mt 88% Wires 66% Pellets Sponge Ferro 16,500 mt 0.5 mt 89% Alloys 83% Iron Steel Power 98 MW*;
Slide 16: GPIL – Focused on Generating Shareholder Value
GPIL – Focused on Generating Shareholder Value Portfolio Improving Balance Sheet De- Clear Strategy Optimisation Financials Leveraging Increasing value FY18 Revenue Net Debt to equity Focus on Integrated addition by enhancing Growth: 40%; EBITDA Reduced to 1.5x from Steel Value Chain captive power M
Slide 17: Increased Captive Consumption Provides Significant Margin Expansion
Increased Captive Consumption Provides Significant Margin Expansion Significant captive mining capacity & multiple long-term linkages aid in lowering costs & improving margins Iron Ore Production (MT) Coal Started • Long-term linkage with Coal India operations • c.75% of total coal sourced from long
Slide 18: Cost Savings Due to Captive Mining
Cost Savings Due to Captive Mining 4917 4000 3500 3200 3000 2750 2600 2492 2181 2275 2050 1800 FY15 FY16 FY17 FY18 Q2FY19 Q3FY19 Market Price of Iron Ore Captive Price of Iron Ore 17
Slide 19: Resulting in Operational Efficiencies Leading to Sustainable Profitability
Resulting in Operational Efficiencies Leading to Sustainable Profitability All numbers in INR Mn Sustainable Growth led by Operational Efficiencies: Backward Market dependent factors with commodity prices Integration & value addition showing strong revival INR 2,379 Mn 734 1,000 4,323 699 1,679 1,39
Slide 20: De-Leveraging a Key Management Priority
De-Leveraging a Key Management Priority Net Debt to Equity (x) Debt Restructuring Resultant Turnaround 3 • Debt restructuring • Credit Rating improved 2 2.1 package implemented in from Junk Grade ‘D’ in March 2017 FY16 to Investment Grade ‘BBB-’ in FY18 • Restructuring included elongation of tenor o
Slide 21: Resulting in Free Cash Flows to Further Improve Balance Sheet
Resulting in Free Cash Flows to Further Improve Balance Sheet Capex Plan: 5,508 FY19 & FY20 4,511 3,771 Maintenance capex: INR 2,927 3,448 400 million p.a. 3,140 2,071 2,581 Value addition in Steel Billet 1,699 process: INR 600 million 556 146 1,063 716 investment (one-time) (570) (2,584) FY14 FY15
Slide 22: Strong Balance Sheet Key for Delivering Through the Cycle
Strong Balance Sheet Key for Delivering Through the Cycle FY16 &17 EBITDA adversely High Finance Cost Further impacted by low commodity prices Exacerbated the Problem Sponge Iron Realization (INR/MT) Finance Cost (INR Mn) 2,520 2,592 2,633 20,964 18,934 2,237 18,277 16,678 1,650 13,310 12,383 1,211
Slide 23: Entity Wise Debt Repayment Schedules
Entity Wise Debt Repayment Schedules All figures in INR MN • Scheduled repayments for FY19 which was INR 1,161 million already paid before Q3 ending • Total INR 1,856 million of long term loan paid in 9 months ending Q3FY19. 1,433 1,285 1,246 1,161 336 259 259 FY23 & Beyond 259 121 83 102 INR 14,840
Slide 24: Business Plan Going Forward
Business Plan Going Forward Efforts Towards Greater Operational Expected Improvement in Efficiencies Business Processes • Sign long-term PPA with Jagdamba Power & Alloys to increase share of • Expected savings of INR 1,000/MT on captive power in Steel Billet incremental production of rolled manufact
Slide 25: Simplified Group Structure to be Supported by Sale of Non Core Assets
Simplified Group Structure to be Supported by Sale of Non Core Assets Associates JVs Godawari Power and Ispat Ltd. 48.45% 33.30% Hira Ferro Alloys Raipur Infrastructure Ltd. Co 76.12% 76.34% 25.93% Godawari Green Ardent Steel Ltd. Energy Ltd. Chattisgarh Captive Coal Mining 51.30% 26.06% 35.36% Goda
Slide 26: Large Portfolio of Long-life Assets
Large Portfolio of Long-life Assets Pelletisation Plant Odisha Solar Thermal Power Plant Keonjhar: 0.6 mn MTPA Rajasthan: 50MW Siltara Integrated Plant Chhattisgarh 2.1 mn MTPA Iron pellets 0.5 mn MTPA Sponge iron 0.4 mn MTPA Steel billets 0.1 mn MTPA HB wire 73 MW power 25 MW power1 Ari Dongri Iron
Slide 27: Board of Directors
Board of Directors Mr Biswajit Choudhary (Chairman & Mr BL Agarwal Independent Director) Managing Director 5 decades of experience in • 1st generation entrepreneur with Engineering, Banking & Finance; almost 4 decades of experience; Mechanical Engineering from IIT, Graduated as an electronic; Kharag
Slide 28: Board of Directors
Board of Directors Mr. Dinesh Gandhi Mr. Shashi Kumar (Independent (Non-Executive Director) Director) 4+ decades of experience; B.Sc. In 3 decades of experience in Mining Engineering; Advisor to Accounts, Finance & Project NTPC, IFFCO & Chhattisgarh Power Financing; Chartered Accountant ltd Mr. B N
Slide 29: Subsidiary | Ardent Steel
Subsidiary | Ardent Steel Operating Metrics o The company has a total production 4,932 5,050 capacity of 0.69 mn MTPA pellet which 3,914 97% located in Phuljhar, Keonjhar, Odisha o The plant uses iron ore from the 61% 50% merchant mines in Barbil, located in the Keonjhar district FY16 FY17 FY18 o Th
Slide 30: Subsidiary | Godawari Green Energy
Subsidiary | Godawari Green Energy Operating Performance o Facility located in village Naukh, 103 23% Jaisalmer, Rajasthan 98 97 22% o GGEL has been set up to implement 91 22% project awarded under Jawaharlal 86 86 Nehru National Solar Mission, Phase I of Govt. of India o The first plant to be commi
Slide 31: GPIL Standalone – Past Operational Performance at a Glance
GPIL Standalone – Past Operational Performance at a Glance... Trend of Pellet Production (mt) Trend of Iron ore Mining (mt) 18,41,050 1579693 15,32,200 15,80,850 14,95,100 1175091 9,02,550 693612 657328 444695 619620 326358 12-13 13-14 14-15 15-16 16-17 17-18 12-13 13-14 14-15 15-16 16-17 17-18 Tren
Slide 32: GPIL Standalone – Past Operational Performance at a Glance
GPIL Standalone – Past Operational Performance at a Glance... Trend of Steel Production (mt) Silico Manganese (MT) 2,27,581 13,700 13,772 13,136 2,04,162 1,97,596 11,403 1,88,190 11,116 185021 1,77,970 9434.04 12-13 13-14 14-15 15-16 16-17 17-18 12-13 13-14 14-15 15-16 16-17 17-18 Trend of Wire Prod
Slide 33: Past Realisations
Past Realisations 76000 72000 68000 68781 67470 66405 64000 64632 60000 56000 53365 53365 52696 52000 51665 48000 44000 41289 40150 43136 39391 41213 40000 34015 34683 38604 36000 36169 39597 39558 35395 28063 32988 32000 33516 32460 34603 34317 28080 33780 28000 31947 26331 28681 27337 27720 24000
Slide 34: GPIL Standalone – Historical Profit & Loss
GPIL Standalone – Historical Profit & Loss Particular (INR MN) Mar-18 Mar-17 Mar-16 Net Sales 21,846 15,460 15,389 Other Income 82 137 123 Total Expenses 17,523 13,829 13,895 EBIDTA 4,405 1,769 1,617 EBIDTA Margin (%) 20% 11% 11% Depreciation 895 782 730 Finance Costs 1,848 1,767 1,632 PBT 1,662 -78
Slide 35: GPIL Consolidated – Historical Profit & Loss
GPIL Consolidated – Historical Profit & Loss Particulars (INR MN) Mar-18 Mar-17 Mar-16 Net Sales 25,888 18,044 19,797 Other Income 87 153 189 Total Expenses 19,919 15,137 17,626 EBIDTA 6,056 3,061 2,360 EBIDTA Margin (%) 23% 17% 12% Depreciation 1,318 1,201 1,265 Finance Costs 2,633 2,592 2,520 PBT
Slide 36: GPIL Consolidated – Historical Balance Sheet
GPIL Consolidated – Historical Balance Sheet EQUITY & LIABILITIES (INR Mn) Mar-18 Mar-17 Mar-16 ASSETS (INR Mn) Mar-18 Mar-17 Mar-16 Shareholders funds Non‐Current Assets Share Capital 341 341 328 Fixed Assets 24,355 24,622 25,123 Reserves and Surplus 8,892 6,628 7,923 Capital Work-In-Progress 1,710
Slide 37: Thank you
Thank you EEDA HIRA- | GODAWARI POWER & ISPAT
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