Godawari Power & Ispat Ltd. · NSE:GPIL
Godawari Power & Ispat — Q2 FY20 Earnings Presentation
40 slides from Godawari Power & Ispat's earnings presentation, Nov 13, 2019
Slide 1: Cover letter to stock exchanges
GODAWARI POWER & ISPAT REF: GPI LINSE&BSE/20 19/39~~ To. I. The Listing Department, 2. The Corporate Relation Department. The National Stock Exchange Limited, The Stock Exchange, Mumbai, Exchange Plaza. Bandra Kurla Complex, I st Floor, Rotunda Building, Bandra (E). MUMBAI - 400051 Dalal Street. MUM
Slide 2: Q2 & H1 FY20 Earnings Presentation
Q2 & H1 FY20 Earnings Presentation November 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: Q2 FY20 Highlights
Q2 FY20 Highlights Q2FY20 Operational Highlights* Production Quantity* Iron Ore production flat at 307,286 MT In MT Q2FY20 Q2FY19 Change % Pellet production 9% higher at 694,934 MT Mining 3,07,286 3,05,207 1% Sponge Iron production 19% higher at 132,275 MT Pellets 6,94,934 6,40,379 9% Steel
Slide 5: Q2FY20 Production Summary
Q2FY20 Production Summary Production (in MT) Q2FY20 Q2FY19 YoY (%) Q1FY20 QoQ (%) Iron ore Mining 3,07,286 3,05,207 1% 4,48,914 -32% Iron ore Pellets - GPIL 5,04,100 5,12,050 -2% 4,76,700 6% Iron Ore Pellets - ASL 1,90,834 1,28,329 49% 1,32,905 44% Sponge Iron 1,32,275 1,11,229 19% 1,22,268 8% Steel
Slide 6: Q2FY20 Sales Summary
Q2FY20 Sales Summary Q2FY20 Q2FY19 Q1FY20 Sales & Realisation* Quantity Realisation Quantity Realisation Quantity Realisation Iron Ore Pellet - GPIL 3,63,604 6,617 3,84,035 6,548 3,25,823 6,353 Iron Ore Pellet - ASL 2,15,129 5,609 1,11,509 5,745 1,28,483 5,355 Sponge Iron 49,894 16,043 43,190 20,642
Slide 7: GPIL Consolidated - Profit & Loss
GPIL Consolidated - Profit & Loss Particulars (in Million) Q2FY20 Q2FY19 YoY (%) Q1FY20 QoQ (%) Net Sales 8,279 8,044 3% 8,338 -1% Total Expenses 6,623 6,000 10% 6,593 0% Other Income 15 10 50% 17 -12% EBITDA 1,672 2,054 -19% 1,762 -5% EBITDA Margin (%) 20.2% 25.5% 21.1% Depreciation 349 336 4% 334
Slide 8: GPIL Standalone - Profit & Loss
GPIL Standalone - Profit & Loss Particulars (in Million) Q2FY20 Q2FY19 YoY (%) Q1FY20 QoQ (%) Net Sales 6,803 7,125 -5% 7,275 -6% Total Expenses 5,692 5,458 4% 6,007 -5% Other Income 8.7 6.9 26% 14.9 -42% EBITDA 1,120 1,674 -33% 1,283 -13% EBITDA Margin (%) 16.5% 23.5% 17.6% Depreciation 232 230 1%
Slide 9: Ardent Steel Limited Standalone - Profit & Loss
Ardent Steel Limited Standalone - Profit & Loss Particulars (in Million) Q2FY20 Q2FY19 YoY (%) Q1FY20 QoQ (%) Net Sales 1,273 713 79% 734 73% Total Expenses 908 505 80% 558 63% Other Income 0.4 0.1 300% 0.1 300% EBITDA 365 209 75% 176 107% EBITDA Margin (%) 28.7% 29.3% 24.0% Depreciation 36 29 24% 3
Slide 10: Godawari Green Energy Limited - Profit & Loss
Godawari Green Energy Limited - Profit & Loss Particulars (in Million) Q2FY20 Q2FY19 YoY (%) Q1FY20 QoQ (%) Net Sales 213 210 1% 341 -38% Total Expenses 35 42 -17% 39 -10% EBITDA 178 171 4% 302 -41% EBITDA Margin (%) 83.6% 81.4% 88.6% Other Income 6 3 100% 2 200% Depreciation 78 78 0% 93 -16% Financ
Slide 11: GPIL Consolidated – Balance Sheet
GPIL Consolidated – Balance Sheet (in INR Mn) Particulars H1FY20 Particulars H1FY20 A ASSETS B EQUITY AND LIABILITIES 1 Non -current assets 1 EQUITY (a) Property, Plant and Equipment 20,925 (a) Equity share capital 341 (b) Capital work-in-progress 1,896 (b) Other equity 12,340 (c) Other intangible a
Slide 12: GPIL Standalone – Balance Sheet
GPIL Standalone – Balance Sheet (in INR Mn) Particulars H1FY20 Particulars H1FY20 A ASSETS B EQUITY AND LIABILITIES 1 Non -current assets 1 EQUITY (a) Property, Plant and Equipment 12,863 (a) Equity share capital 341 (b) Capital work-in-progress 1,014 (b) Other equity 11,166 (c) Other intangible ass
Slide 13: Q2FY20 Return & Liquidity Ratios
Q2FY20 Return & Liquidity Ratios Unit Standalone Ardent GGEL Consolidated RoE % 14% 39% 3% 15% RoCE % 19% 43% 9% 20% BVPS INR 337 - - 423 Net Debt to EBITDA x 2.17 0.67 4.39 2.20 Net Debt to Equity x 1.02 0.47 1.57 1.14 Interest Coverage x 3.18 7.42 1.81 3.18 12
Slide 14: 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. • Aiming towards 100% captive utilisation of sponge iron for increased production of steel billet • Further value addition on stee
Slide 15: Global Tailwinds
Global Tailwinds International Market o Global finished steel prices have witnessed a significant drop of almost 15%-20% over the last 8-9 months while its raw materials like Iron Ore & Iron Ore Pellets have seen price declines of ~10% & ~12% respectively. Iron Ore Pellet prices have cooled to ~$101
Slide 16: Outlook on Global Steel Demand
Outlook on Global Steel Demand Crude Steel Production (in MT) 1,790 1,730 1,650 1,669 1,620 1,627 1,538 1,560 1,433 1,390 1,348 1,343 1,250 1,239 1,148 1,063 971 905 850 852 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019* *Data until September 201
Slide 17: Domestic Demand Outlook
Domestic Demand Outlook Total Crude Steel Production (million tonnes) Total Finished Steel Production (million tonnes) 6.4% CAGR 2.33% CAGR 106.56 103.13 131.72 126.86 97.95 120.14 104.578 89.79 88.98 81.69 106.6 78.42 74.29 70.67 65.84 58.44 53.86 FY19P FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16
Slide 18: Investor Presentation
HIRA- GODAWARI POWER & ISPAT INVESTOR PRESENTATION
Slide 19: 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 77% Rounds 85% HB 0.15 mt Iron Ore 2.7 mt 92% Wires 90% Pellets Sponge Ferro 16,500 mt 0.5 mt 93% Alloys 64% Iron Steel Power 98 MW*;
Slide 20: 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 21: Strategy Focused on Consistent Profitability
Strategy Focused on Consistent Profitability All numbers in INR Mn EBITDA INR Mn 2.6x 7,952 6,056 3,434 3,061 2,360 FY16 FY17 FY18 FY19 H1FY20 Based on consolidated numbers 20
Slide 22: 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 • Long-term linkage with Coal India to the extent of 75% of total requirement. Started operati
Slide 23: Captive Mining Leading To Huge Raw Material Costs Saving
Captive Mining Leading To Huge Raw Material Costs Saving 4,346 4,270 3,850 3,500 3,200 3,000 2,750 2,600 2,537 2,462 2,310 2,181 2,050 1,800 FY15 FY16 FY17 FY18 FY19 Q1FY20 Q2FY20 Market Price of Iron Ore Captive Ore Landed Cost 22
Slide 24: Improving Liquidity Ratios
Improving Liquidity Ratios 5,508 5,498 4,511 3,771 Cash Flows from 3,140 2,934 Operation 2,581 Capex 1,699 1,063 827 817 Free Cash Flows 556 716 146 FY14 FY15 FY16 FY17 FY18 FY19 H1FY20 Net Debt to EBITDA Net Debt to Equity 2.75 9.87 2.54 8.09 8.14 2.132.05 1.911.94 7.07 1.38 1.27 1.14 3.423.11 0.95
Slide 25: Incremental Cash Flows to be Utilised for De-Leveraging
Incremental Cash Flows to be Utilised for De-Leveraging All figures in INR MN Paid c2x times over Debt repayment of the scheduled FY20, repaid by H1FY20 already Debt Repayment Schedule repayment in FY19 GPIL (Standalone) ASL GGE 2,430 1,303 1,032 1,031 1,123 330 255 255 65 25 49 1,161 259 64 752 908
Slide 26: FY20: Three Pronged Strategy to Drive Growth
FY20: Three Pronged Strategy to Drive Growth Focus on Value Asset Optimisation De-leveraging Addition o Incremental free o Increasing o Billet capacity cash flows to be used capacity utilisation to for debt reduction utilisation improve to 90%+ o Gross Debt to be across value o Commissioning of redu
Slide 27: How we improved Sustainable EBITDA
How we improved Sustainable 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 Production Sustai
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% 33.96% 35.36% Godawari Energy Ltd. Jagdamba Power & Chhattisgarh Ispat A
Slide 29: 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 30: 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 31: 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 32: 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 33: 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 34: 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 35: 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 36: 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 37: 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 38: 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 39: 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 40: Thank you
Thank you i SODA HIRA- | GODAWARI POWER & ISPAT #
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