Godawari Power & Ispat Ltd. · NSE:GPIL
Godawari Power & Ispat — Q4 FY2019 Earnings Presentation
42 slides from Godawari Power & Ispat's earnings presentation, May 1, 2019
Slide 1: Corporate Presentation cover letter to stock exchanges
--H1RA-- GODAWARI POWER & ISPAT REF: GPILINSE&BSE/2019I.3S~i. Date: 01.05.2019 To, 1. The Listing Department, 2. The Corporate Relation Department, The National Stock Exchange Limited, The Stock Exchange, Mumbai, Exchange Plaza, Bandra Kurla Complex, 1SI Floor, Rotunda Building, Bandra (E), MUMBAI -
Slide 2: Q4 and FY19 Earnings Presentation
Q4 and FY19 Earnings Presentation May 2019 1
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: Q4 & FY19 Highlights
Q4 & FY19 Highlights Highest-ever production of • Pellets at 1,933,250 MT, up 5% YoY • Steel Billets at 298,418 MT, up 51% YoY • MS Rounds at 182,088 MT, up 28% YoY • HB Wire at 134,559 MT, up 15% YoY Highest-ever • Annual Consolidated Revenue at 33,216 mn, up 31% YoY • Annual Consolidated EBITDA at
Slide 5: FY19: Strong Growth despite a Challenging Environment
FY19: Strong Growth despite a Challenging Environment o Term debt reduced by 2,430 mn to INR 17,463 mn Restoring Balance Sheet o All repayments done much ahead of schedule o All-time high revenues of INR 33,210 mn Strong Financial Performance o FY19 EBITDA: INR 7,952 mn, up 31% YoY o Mine produc
Slide 6: Strategy Focused on Consistent Profitability
Strategy Focused on Consistent Profitability All numbers in INR Mn EBITDA INR Mn 2.6x 7,952 6,056 3,061 2,360 2016 2017 2018 FY19 Based on consolidated numbers 5
Slide 7: Sustainable Growth led by Operational Efficiencies, Backward Integration & Value Addition
Sustainable Growth led by Operational Efficiencies, Backward Integration & Value Addition Utilisation Levels 92% 92% 91% 90% 88% 88% 79% 77% 78% 75% 71% 49% Iron Ore Mining Iron Ore Pellet Sponge Iron Steel Billets M.S.Round H.B.Wire FY18 FY19 • 90%+ Utilisation levels in Pellets, Sponge iron, MS Ro
Slide 8: Drivers to Strong EBITDA growth
Drivers to Strong EBITDA growth All numbers in INR Mn Market dependent factors with commodity prices Sustainable Factors contribution to EBITDA showing strong revival INR 5,359 Mn Standalone EBITDA for GPIL; Godawari Green (Solar Power) EBITDA not included 7
Slide 9: Resulting in Higher Incremental FCFs for Deleveraging
Resulting in Higher Incremental FCFs for Deleveraging 5,508 5,498 4,511 3,771 Cash Flows from 3,140 Operation 2,581 Capex 1,699 1,063 827 Free Cash Flows 556 716 146 FY14 FY15 FY16 FY17 FY18 FY19 Net Debt to EBITDA Net Debt to Equity 2.75 9.87 2.54 8.14 2.13 2.05 8.09 1.91 1.94 7.07 1.38 1.27 3.42 3
Slide 10: FY20: Three Pronged Strategy to Drive Growth
FY20: Three Pronged Strategy to Drive Growth Focus on Value Asset Optimisation De-leveraging Addition o Increasing o Billet capacity o Incremental free cash capacity utilisation to flows to be used for utilisation improve to 90%+ debt reduction across value o Commissioning of o Gross Debt to be chai
Slide 11: Incremental Cash flows used for De-leveraging
Incremental Cash flows used for De-leveraging as evident Deleveraging balance sheet continues to remain focus Debt Repayment Schedule Paid c2x times over the scheduled repayment in FY19 FY23 & Beyond 2,430 INR 14,096.1 mn GPIL – INR 9,493.1 mn ASL – INR 947.9 mn GGE – 3,627.9 mn 1,303 1,161 1,
Slide 12: Supply Disruption across Domestic and Intl Markets to protect margin
Supply Disruption across Domestic and Intl Markets to protect margin o Major supply disruption as Iron Ore major reduces guidance – Production loss of 95- 100 mn tonnes o Vale has reduced it’s guidance for 2019 production by 75 mnt as it grapples with environmental issues at it’s mines. o Both Rio a
Slide 13: Results Review
® Results Review ann _HIRA- GODAWARI POWER & ISPAT 12
Slide 14: Q4 and FY19 Production Summary
Q4 and FY19 Production Summary Production (in MT) FY19 FY18 YoY (%) Q4 FY19 Q4 FY18 YoY(%) Iron ore Mining 1,547,384 1,579,693 -2% 436,053 430,173 1% Iron ore Pellets - GPIL 1,933,250 1,841,050 5% 540,000 487,450 11% Iron Ore Pellets - ASL 572,673 590,876 -3% 165,345 151,291 11% Sponge Iron 460,008
Slide 15: Q4 and FY19 Sales Summary
Q4 and FY19 Sales Summary FY19 FY18 Sales & Realization Quantity (MT) Realization (/tons) Quantity (MT) Realization (/tons) Iron Ore Pellet - GPIL 1,452,549 6,809 1,247,361 5,365 Iron Ore Pellet - ASL 560,831 6,053 584,459 5,050 Sponge Iron 140,218 19,736 228,469 16,678 Steel Billets 121,632 33,072
Slide 16: GPIL Consolidated - Profit & Loss
GPIL Consolidated - Profit & Loss Particulars (in Million) FY19 FY18 YoY (%) Q4FY19 Q4FY18 YoY (%) Net Sales 33,216 25,274 31% 8,944 7,429 20% Total Expenses 25,323 19,305 27% 7,066 5,355 32% Other Income 58 87 -33% 30 39 -24% EBITDA 7,952 6,056 31% 1,907 2,113 -10% EBITDA Margin (%) 24% 23% 21% 28%
Slide 17: GPIL Standalone - Profit & Loss
GPIL Standalone - Profit & Loss Particulars (in Million) FY19 FY18 YoY (%) Q4FY19 Q4FY18 YoY (%) Net Sales 28,753 21,259 35% 7,661 6,225 23% Total Expenses 22,556 16,936 33% 6,148 4,695 31% Other Income 30 82 -63% 9 38 -76% EBITDA 6,226 4,405 41% 1,522 1,569 -3% EBITDA Margin (%) 22% 21% 20% 25% Dep
Slide 18: Ardent Steel Limited Standalone - Profit & Loss
Ardent Steel Limited Standalone - Profit & Loss Particulars (in Million) FY19 FY18 YoY (%) Q4FY19 Q4FY19 YoY (%) Net Sales 3,540 2,961 20% 1,054 934 13% Total Expenses 2,628 2,201 19% 904 607 49% Other Income 3 4 -28% 2 1 45% EBITDA 915 764 20% 152 327 -54% EBITDA Margin (%) 26% 26% 14% 35% Deprecia
Slide 19: Godawari Green Energy Limited - Profit & Loss
Godawari Green Energy Limited - Profit & Loss Particulars (in Million) FY19 FY18 Q4FY19 Q4FY18 Net Sales 928 1,054 229 270 Total Expenses 174 167 13 54 Other Income 7 12 19 3 EBITDA 762 899 234 219 EBITDA Margin (%) 82% 85% 103% 81% Depreciation 304 311 74 80 Finance Costs 532 580 131 142 PBT -73 8
Slide 20: GPIL Consolidated – Balance Sheet
GPIL Consolidated – Balance Sheet INR Mn 31.03.2019 31.03.2018 31.03.2019 31.03.2018 A ASSETS B EQUITY AND LIABLITIES 1 Non -current assets 1 EQUITY (a) Property, Plant and Equipment 21,332 21,377 (a) Equity share capital 341 341 (b) Capital work-in-progress 1,302 1,710 (b) Other equity 11,352 8,892
Slide 21: GPIL Standalone – Balance Sheet
GPIL Standalone – Balance Sheet INR Mn 31.03.2019 31.03.2018 31.03.2019 31.03.2018 A ASSETS B EQUITY AND LIABLITIES 1 Non -current assets 1 EQUITY (a) Property, Plant and Equipment 13,115 12,841 (a) Equity share capital 341 341 (b) Capital work-in-progress 448 886 (b) Other equity 10,434 8,332 (c) O
Slide 22: Investor Presentation
HIRA- GODAWARI POWER & ISPAT Investor Presentation 21
Slide 23: Integrated Asset Portfolio; Unique Presence Across Steel Value Chain
Integrated Asset Portfolio; Unique Presence Across Steel Value Chain Asset FY 19 Utilisation Asset Capacity FY19 Utilisation Capacity 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 24: GPIL – Focused on Generating Shareholder Value
GPIL – Focused on Generating Shareholder Value Portfolio Improving Balance Sheet De- Clear Strategy Optimisation Financials Leveraging Increasing value FY19 Revenue Net Debt to equity Focus on Integrated addition by enhancing Growth: 31%; Reduced to 1.4x from Steel Value Chain captive power EBITDA M
Slide 25: 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 26: As Evident in Cost Savings Due to Captive Mining
As Evident in Cost Savings Due to Captive Mining 4,346 3,500 3,200 3,000 2,750 2,600 2,310 2,181 2,050 1,800 FY15 FY16 FY17 FY18 FY19 Market Price of Iron Ore Captive Price of Iron Ore 25
Slide 27: Business Strategy Going Forward
Business Strategy Going Forward Efforts Towards Greater Operational Efficiencies • Billet production increased through long term supply of power under PPA with Jagdamba. • 100% captive utilisation of sponge iron for increased production of steel billet. • Further value addition on steel billet throu
Slide 28: Group Structure
Group Structure 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% Godawari Energy Ltd. Jagdamba Power & Chhattisgarh Ispat A
Slide 29: 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 30: 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 31: 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 power from JPL Ari Don
Slide 32: 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 33: 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 34: Subsidiary | Godawari Green Energy
Subsidiary | Godawari Green Energy Operating Performance 22% 23% 22% o Facility located in village Naukh, 103 97 98 85 Jaisalmer, Rajasthan 86 91 86 19% 75 o GGEL has been set up to implement project awarded under Jawaharlal Nehru National Solar Mission, Phase I of Govt. of India o The first plant t
Slide 35: Subsidiary | Ardent Steel
Subsidiary | Ardent Steel Operating Metrics o The company has a total production 5,050 6,053 4,932 95% 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
Slide 36: GPIL Standalone – Past Operational Performance at a Glance
GPIL Standalone – Past Operational Performance at a Glance... Trend of Iron Ore Mining (mt) Trend of Pellets Production (mt) 15,79,693 15,47,384 19,33,250 18,41,050 11,75,090 15,32,200 15,80,850 14,95,100 6,93,612 6,57,328 9,02,550 4,44,695 6,19,620 3,26,358 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19
Slide 37: GPIL Standalone – Past Operational Performance at a Glance
GPIL Standalone – Past Operational Performance at a Glance... Trend of Steel Production (mt) Silico Manganese (mt) 2,98,418 13,700 13,772 13,136 11,116 11,403 2,27,581 10,537 9,434 2,04,162 1,97,596 1,85,021 1,88,190 1,77,970 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 13 FY 14 FY 15 FY 16 FY 17 FY
Slide 38: Past Sales Realisations
Past Sales Realisations Sponge Iron Iron ore Pellet 20,964 19,736 9,017 18,934 18,277 7,872 7,798 16,678 6,809 13,310 5,067 5,365 12,383 4,360 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY19 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY19 Steel Billets 33,072 31,947 29,493 28,681 27,720 22,689 21,830 FY 13 FY 14
Slide 39: Past Sales Realisations
Past Sales Realisations M.S. Round H.B. Wire 38,740 35,373 40,666 33,265 33,409 32,460 38,332 36,169 34,683 34,015 27,034 26,330 28,080 28,063 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY19 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY19 Silico Manganese 67,611 64,632 53,783 53,365 52,696 51,665 43,139 FY 13 FY
Slide 40: GPIL Consolidated – Historical Profit & Loss
GPIL Consolidated – Historical Profit & Loss Particulars (in Million) FY19 FY18 FY17 FY16 Net Sales 33,216 25,274 19,941 22,037 Total Expenses 25,323 19,305 17,033 19,866 Other Income 58 87 153 189 EBITDA 7,952 6,056 3,061 2,360 EBITDA Margin (%) 24% 23% 15% 11% Depreciation 1,329 1,318 1,201 1,265
Slide 41: GPIL Consolidated – Historical Balance Sheet
GPIL Consolidated – Historical Balance Sheet Particulars (INR mn) FY19 FY18 FY17 FY16 Net Worth 13,364 10,837 8,503 8,983 Non‐Controlling Interest 1,672 1,604 1,533 1,034 Debt Long Term Debt 16,431 18,730 19,799 13,660 Short Term Debt 1,393 1,344 1,955 3,408 Other Long Term Liabilities 127 103 82 66
Slide 42: Thank you
Thank you EEDA HIRA- | GODAWARI POWER & ISPAT aa
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