Sarda Energy & Minerals Limited · NSE:SARDAEN
Sarda Energy & Minerals — Q3 FY2019 Earnings Presentation
37 slides from Sarda Energy & Minerals's earnings presentation, February 2019
Slide 1: Q3 & FY19 Results Presentation
February 2019 Q3 & FY19 RESULTS PRESENTATION
Slide 2: Discussion Summary
01 Company Overview 02 Business Overview 03 Strategic Priorities & Growth Outlook 04 Q3 & 9M FY19 Results DISCUSSION 05 Annexure SUMMARY 1
Slide 3: Company Overview
COMPANY OVERVIEW 2
Slide 4: Health and Safety
Health and Safety Assets & Operational Details • At SEML, safety is taken as top priority. The workers are equipped with necessary safety gears on their operational role • Regular medical check-up and in house medical facilities ensure that workers keep in good health • The incident rate (including
Slide 5: Key Milestones
Key Milestone Key Milestones Installed 25 TPD Electric Arc 4.8 MW Hydro power plant Furnance in 1990 operationalised in 2008-09 Acquired 3 Power units in Pellet plant commenced 1993-94 operations in 2009-10 Installed Two Sponge Iron 66 MVA Ferro Alloys plant Kilns of 30K MT each in and 80 MW Thermal
Slide 6: Company at a Glance
Company Companyat ata Glance aGlance Glance Operations Financials Revenues grew at 21% CAGR Vertically integrated producer Financial over last two years. EBITDA of steel with captive Steel Performance grew at 45% CAGR over raw materials the same period Leverage is one of the lowest in Leading Manufa
Slide 7: Company at a Glance: FY18 a Landmark Year
Company at a Glance GlanceYear in Sarda History FY18 – A Landmark Pellets Highest ever pellet production of 600,000 MT Billets Highest ever billet production of 136,000 MT Ferro Alloys Highest ever ferro alloys production of 148,982 MT Hydro Power Highest ever energy generated of 19.1 Mn units Reven
Slide 8: Business Operations: Geographical Footprint
Operations Business Operations: Geographical Footprint Lower transportation costs due to close proximity to raw materials and end users 4.8MW in Uttarakhand 96MW in Sikkim Rajnandgaon (Iron Ore mine) to Siltara (SEML Plant) 140 kms 24MW in Gullu Iron ore mine in SEML plant in Siltara Rajnandgaon SMA
Slide 9: Product Offerings and Demand Drivers
Product Offerings Business Offerings Demand Drivers Iron Ore Sponge Pellet & Iron Infrastructure & Urban development Steel Housing for All Wire Rod Billet & HB Wire Construction demand All types of steel, demand aligned Manganese Manganese to increase in steel demand Silico Ferro Ferro – Alloys Requ
Slide 10: Board of Directors
Board of Directors Kamal Kishore Sarda, CMD Mechanical Engineer with 40 years experience in Iron and Steel Industry. He is responsible for steering SEML towards the path of growth Pankaj Sarda, Jt Managing Director Padam Kumar Jain, Director and CFO Uma Sarda, Director MS in Industrial Administratio
Slide 11: Strong Corporate Governance
Strong Corporate Governance Experienced Board Employee Engagement Values 60% independent directors with diverse Clear thought process on business and Management has a culture of ethical experience who play an important role in alignment of employee goals with the values to be followed while working
Slide 12: Business Overview
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Slide 13: Steel Business: Industry Overview
Steel Business: Industry Overview India's Crude Steel Production (Mn Tonnes) Sector Overview 102 107 • India became the 2nd largest crude steel producer in 2018, as 96 87 90 large public and private sector players strengthened steel production capacity in the view of rising demand • India is the lar
Slide 14: Steel Business: Product Offerings
Steel Business: Product Offerings Iron ore • Iron ore mines near SEML plant in Siltara • Production run rate of 500,000 MT with mine life of 30 years • Pellets are produced from Iron Ore Fines & majorly sold in local markets; balance is captively used for production of Sponge Iron Pellet • The capac
Slide 15: Steel Business: Iron Ore
Steel Business: Iron Ore Assets & Operational Details • Company’s operational Iron Ore mine has potential reserves of 18 Million MT and annual production output of 400,000 MT * • Semi-mechanised mine commenced operation in 2004 • Iron ore business act as a feeder to Pellet & Sponge Iron Plants • Hig
Slide 16: Steel Business: Pellet & Sponge Iron
Steel Business: Pellet & Sponge Iron Pellet Sponge Iron • Current production capacity of 600,000 MT • Current production capacity of 360,000 MT • 65% of the production is sold externally and remaining is • Since India has ample supply of thermal coal, sponge iron is the processed internally for furt
Slide 17: Steel Business: Billet
Steel Business: Billet Billet • Current production capacity of 200,000 MT • 15% of the production is sold externally, remaining is processed internally for further downstream production • The company plans to expand steel billet capacity to 300,000 MT by end of FY19 • Well positioned with complete b
Slide 18: Steel Business: Wire Rod and HB Wire
Steel Business: Wire Rod and HB Wire Wire Rod • Current production capacity of 180,000 MT, with capacity utilization of over 60% • Wire Rod is a hot rolled product made from hot charged Billets • High strength products offered at reasonable price in the local markets • Wire Rod is sold to local mark
Slide 19: Ferro Alloys: Industry Overview
Ferro Alloys: Industry Overview Sector Overview • Ferro Alloys are vital additives for steel manufacturing • Ferro Alloys enhance the strength of the steel and act as a de-oxidant in steel manufacturing • Approximately 1.5% of Manganese Alloy is required to produce every tonne of steel Future Growth
Slide 20: Ferro Alloys Business
Ferro Alloys Business Ferro Alloys Ferro Alloys Production (‘000 MT) • Company has two operational plants of Ferro Alloys which are located at Raipur and Vizag with a total installed capacity of 149 128 111 MVA 113 107 113 • The company manufactures manganese based Ferro Alloys which are sold domest
Slide 21: Hydro Power Business: Industry Overview
Hydro Power Business: Industry Overview India’s Hydropower Capacity • Government of India has set a target of adding 175 GW of renewable power in the country by 2022 44478 45293 45399 42783 40531 41267 • Government has earmarked $250 Billion for renewable energy over next 5 years • Discoms are manda
Slide 22: Hydro Power Business: Industry Overview
Hydro Power Business: Industry Overview RTC Power Exchange Prices (Rs/ KWH) 6.3 5.73 5.3 4.69 4.57 4.3 3.97 4.02 3.68 3.68 3.68 3.58 3.45 3.41 3.33 3.3 3.2 3.22 3.3 3.06 2.67 3.19 2.55 2.65 2.5 2.36 2.36 2.19 2.2 2.11 2.3 2.05 2.05 2.03 2.05 2.06 1.91 2.13 1.89 1.86 2.01 2.06 1.98 1.9 2.06 1.84 1.77
Slide 23: Hydro Power Business
Hydro Power Business Uttarakhand Chhattisgarh Sikkim 96MW 4.8MW 24MW Chhattisgarh 24MW Operational since 2008 Operational since July, 2017 Under Execution Operated at 45.42% PLF during Expected PLF to be around 50% in Sikkim power plant to be FY14-17 FY19 commissioned in FY20 PPA signed at Rs 3.85 p
Slide 24: Strategic Priorities and Growth Outlook
STRATEGIC PRIORITIES AND GROWTH OUTLOOK
Slide 25: Strategic Priorities
Strategic Priorities 01 02 03 04 Financial Discipline Profitable Growth Integrated Operations Identifying next growth avenues Maintain financial health of the Gradually ramping up Iron Different business divisions Strategically expanding ongoing Company, with Debt / Equity Ore production capacity co
Slide 26: Project Expansion Plan
Project Expansion Plan Capacity Capacity Incremental Spend Project Remarks pre-expansion Post-expansion Capex till date Approvals are required Steel 600,000 MT 750,000 MT Nil Nil Pellets will be sold externally along with captive (Pellet plant) consumption The upcoming steel plant will be commission
Slide 27: Q3 & 9M FY19 Results
Q3 & 9M FY19 RESULTS
Slide 28: Q3 & 9M FY19: Key Result Highlights (Consolidated)
Q3 & 9M FY19: Key Result Highlights (Consolidated) Q3 FY19 YoY Analysis In Rs Mn REVENUES * EBITDA & EBITDA MARGIN PAT & PAT MARGIN 24.4% 10.2% 12.6% 6,139 19.2% 5,235 1,462 771 17.3 % 1,000 46.1 % 536 43.8 % Q3 FY18 Q3 FY19 Q3 FY18 Q3 FY19 Q3 FY18 Q3 FY19 9M FY19 YoY Analysis REVENUES * EBITDA & EB
Slide 29: Q3 & 9M FY19: Segment Analysis
Q3 & 9M FY19: Segment Analysis Segment Revenues (Rs Mn) Q3 FY19 Q3 FY18 YoY % 9M FY19 9M FY18 YoY % Steel 3,245 2,285 42.0% 9,013 6,431 40.1% % of Total 46.3% 37.9% 42.8% 35.3% Ferro Alloys 2,523 2,712 -7.0% 8,259 8,756 -5.7% % of Total 36.0% 45.0% 39.2% 48.1% Power 1,209 995 21.5% 3,761 2,955 27.3%
Slide 30: Q3 & 9M FY19: Segment Wise Production Data
Q3 & 9M FY19: Segment Wise Production Data Production Q3 FY19 Q3 FY18 YoY % 9M FY19 9M FY18 YoY % Steel 3,13,321 2,86,981 9.2% 9,74,262 9,20,428 5.8% Iron ore Pellet (MT) 1,71,198 1,54,504 10.8% 5,36,997 5,13,567 4.6% Sponge Iron (MT) 76,379 62,712 21.8% 2,23,000 1,99,389 11.8% Steel Billet (MT) 36,
Slide 31: Consolidated Profit & Loss
Consolidated Profit & Loss Particulars (Rs Mn) Q3 FY19 Q3 FY18 YoY % 9M FY19 9M FY18 YoY % FY18 Revenue from Operations * 6,004 5,200 15.5% 18,042 15,702 14.9% 21,521 Other Operating Income 135 34 291.9% 241 121 99.1% 216 Total Revenues 6,139 5,235 17.3% 18,283 15,823 15.5% 21,737 COGS 3,956 3,552 1
Slide 32: Consolidated Balance Sheet
Consolidated Balance Sheet Liabilities (Rs Mn) H1 FY19 FY18 Assets (Rs Mn) H1 FY19 FY18 Equity Share Capital 360 360 Fixed Assets 22,217 21,420 Other Equity 17,138 16,289 Investments 522 548 Total Equity 17,499 16,649 Other Financial Assets 171 165 Borrowings 9,881 9,832 Other Non-Current Assets 755
Slide 33: Annexure
SARDA ENERGY & MINERALS LTD. QSARDA
Slide 34: Financial Summary
Financial Summary In Rs Mn REVENUES EBITDA & EBITDA MARGIN 21,737 21.5% 18.5% 13.0% 15.1% 17,599 14,799 14,342 3,773 4,016 1,920 2,170 FY15 FY16 FY17 FY18 FY15 FY16 FY17 FY18 PAT & PAT MARGIN DEBT / EQUITY RATIO 9.5% 1.16 8.6% 8.9% 0.94 0.95 0.83 2,057 3.2% 1,277 1,270 16,649 12,803 12,958 14,407 56
Slide 35: Annexure: Realization
Annexure Realization Trends in Sales Realization (Rs / MT) 72,122 65,125 58,208 55,890 54,312 54,306 53,344 53,443 46,434 44,113 35,079 34,244 33,898 32,480 32,110 33,639 27,795 27,089 28588 28963 27587 26,013 26,040 23265 21601 18,561 19,112 16,842 13,506 12,206 5,272 8,137 4,958 7,747 4,245 FY 14
Slide 36: Production & Sales
Production & Sales Production FY16 FY17 FY18 External Sales FY16 FY17 FY18 Pellet ( MT) 494,916 599,925 599,950 Pellet ( MT) 252,750 207,786 383,831 Sponge Iron (MT) 265,508 304,193 278,147 Sponge Iron (MT) 143,250 176,315 150,415 Steel Billet (MT) 134,566 133,442 136,349 Steel Billets (MT) 37,852 2
Slide 37: Thank You
Aakash Mehta - IR Consultant Contact No: +91 98706 79263 Email: Aakash.mehta@dickensonir.com THANK Padam Kumar Jain - CFO YOU Contact No: +91 77122 14238 Email: pkjain@seml.com
Sarda Energy & Minerals — Q3 FY2019 Earnings Presentation on 6ix