Godawari Power & Ispat Ltd. · NSE:GPIL
Godawari Power & Ispat — Investor Presentation (May 2019)
30 slides from Godawari Power & Ispat's investor presentation, May 31, 2019
Slide 1: Intimation of investors meet to stock exchanges
--J.I1RA-- GODAWARI POWER & ISPAT REF: GPILINSE&BSE/20 19/3835 Date: 3 I .05.2019 To, I. The Listing Department, 2. The Corporate Relation Department, The National Stock Exchange Limited, The Stock Exchange, Murnbai, Exchange Plaza, Bandra Kurla Complex, lSI Floor. Rotunda Building. Bandra (E), MUMB
Slide 2: Investor Connect June 2019
HIRA- GODAWARI POWER & ISPAT Investor Connect June 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: Godawari Power & Ispat: Growing Stronger Together
Godawari Power & Ispat: Growing Stronger Together • A fully backward integrated steel company with strong A fully Integrated Steel presence across the steel value Chain, present in every Company part of the Steel Value Chain – from operating 2 Iron Ore Mines to manufacturing & selling value-added st
Slide 5: GPIL – Group Structure
GPIL – 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% 33% 35.36% Godawari Energy Ltd. Jagdamba Power & Chhattisgarh Isp
Slide 6: 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 7: 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 Jagdamba Power Plant 0.5 mn MTPA Sponge iron Raipur; GPIL owns 33% 0.4 mn MTPA Steel billets 0.1 mn MTPA HB wi
Slide 8: Our Captive Mines Give us an Unparallel Advantage
Our Captive Mines Give us an Unparallel Advantage Significant captive mining capacity & multiple long-term linkages aid in lowering costs & improving margins Iron Ore Production (MT) Coal • Long-term linkage with Coal India Started operations • c.75% of total coal sourced from long term linkage Star
Slide 9: And Huge Raw Material Costs Saving
And Huge Raw Material Costs Saving 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 Landed Market Price Captive Ore Landed Cost 8
Slide 10: 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 11: 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 10
Slide 12: Efforts Towards Greater Operational Efficiencies
Efforts Towards Greater Operational Efficiencies • Plans to revisit Jagdamba merger. • 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 t
Slide 13: The Winning Combination
The Winning Combination Improving competitive advantage through greater integration and higher value addition Restoring balance Disposal of non sheet strength core assets to through significant become a focussed deleveraging steel company Target to become a debt-free & dividend paying company 12
Slide 14: GPIL Consolidated – Operating Performance for FY19
GPIL Consolidated – Operating Performance for FY19 Particulars (in INR 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 Margi
Slide 15: 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 16: 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 1,063 827 716 Free Cash Flows 556 146 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 17: Incremental Cash flows to be utilised for De-Leveraging
Incremental Cash flows to be utilised for De-Leveraging Paid c2x times over the scheduled repayment Debt Repayment Schedule in FY19 All figures in INR MN 2,430 GPIL (Standalone) ASL GGE 1,303 1,123 330 1,032 255 65 255 49 1,161 25 259 64 908 819 752 839 FY 19 FY 19 AR FY 20 FY 21 FY 22 FY20 Repaymen
Slide 18: 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 improve flows to be used for utilisation across to 90%+ debt reduction value chain to o Commissioning of o Gross Debt t
Slide 19: FY20: Supportive Global Tailwinds
FY20: Supportive Global Tailwinds International Market o Major supply disruption as Iron Ore major reduces guidance – Production loss of 95-100 mn tonnes − Vale has reduced it’s guidance for 2019 production by 75 mnt as it grapples with environmental issues at it’s mines. − Both Rio and BHP have als
Slide 20: How we Improved Sustainable Standalone EBITDA
How we Improved Sustainable Standalone EBITDA Cost Savings at Mid Production (MT) EBITDA (Rs Mn) Cycle (Rs/Tonne) FY16 “Bottom of 2,086 Cycle” EBITDA Increase Captive 0.90 1,000 900 Iron Ore Production Increase in Pellet/Sponge Iron 0.88 1,500 1,320 Production Increase in Steel 0.13 5,000 640 Produc
Slide 21: Appendix
HIRA- GODAWARI POWER & ISPAT Appendix 20
Slide 22: 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 23: 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 24: 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 25: 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 26: 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 27: 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 28: 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 29: 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 30: Thank you
Thank you For further information, please get in touch with: Sheetal Khanduja sheetal@GoIndiaAdvisors.com M:+91 97693 64166 Tanya Khosla tanya@GoIndiaAdvisors.com M:+91 97693 87813 29
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