Godawari Power & Ispat Ltd. · NSE:GPIL
Godawari Power & Ispat — Q1 FY20 Earnings Presentation
38 slides from Godawari Power & Ispat's earnings presentation, Aug 10, 2019
Slide 1: Filing cover letter to stock exchanges
--H1RA-- GODAWARI POWER & ISPAT REF: GPILINSE&BSE/20 19/3908 Date: 10.08.2019 To, I. The Listing Department, 2. The Corporate Relation Department, The National Stock Exchange Limited, The Stock Exchange, Mumbai, Exchange Plaza, Sandra Kurla Complex, I SI Floor, Rotunda Building, Sandra (E),MUMSAI- 4
Slide 2: Q1 Earnings Presentation August 2019
Q1 Earnings Presentation August 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: Q1 FY20 Highlights
Q1 FY20 Highlights Q1FY20 Operational Highlights* Production Quantity* Iron Ore production 7% higher at 448,914 MT In MT Q1FY20 Q1FY19 Change % Pellet production 13% higher at 609,605 MT Mining 4,48,914 4,17,764 7% Sponge Iron production 9% higher at 122,268 MT Pellets 6,09,605 5,38,381 13%
Slide 5: Q1FY20 Production Summary
Q1FY20 Production Summary Production (in MT) Q1FY20 Q1FY19 YoY (%) Q4FY19 QoQ (%) Iron ore Mining 4,48,914 4,17,764 7% 4,36,053 3% Iron ore Pellets - GPIL 4,76,700 4,45,900 7% 5,40,000 -12% Iron Ore Pellets - ASL 1,32,905 92,481 44% 1,65,345 -20% Sponge Iron 1,22,268 1,12,162 9% 1,23,858 -1% Steel B
Slide 6: Q1FY20 Sales Summary
Q1FY20 Sales Summary Q1FY20 Q1FY19 Q4FY19 Sales & Realisation Quantity Realisation Quantity Realisation Quantity Realisation Iron Ore Pellet - GPIL 3,25,823 6,763 3,52,348 5,958 4,01,771 6,737 Iron Ore Pellet - ASL 1,28,483 5,621 1,03,333 4,988 1,77,431 5,489 Sponge Iron 36,955 17,898 43,454 19,730
Slide 7: GPIL Consolidate - Profit & Loss
GPIL Consolidate - Profit & Loss Particulars (in Million) Q1FY20 Q1FY19 YoY (%) Q4FY19 QoQ (%) Net Sales 8,338 7,201 16% 8,944 -7% Total Expenses 6,593 5,365 23% 7,066 -7% Other Income 17 9 93% 30 -44% EBITDA 1,762 1,845 -4% 1,908 -8% EBITDA Margin (%) 21.13 25.62 21.33 Depreciation 334 332 1% 334 0
Slide 8: GPIL Standalone - Profit & Loss
GPIL Standalone - Profit & Loss Particulars (in Million) Q1FY20 Q1FY19 YoY (%) Q4FY19 QoQ (%) Net Sales 7,275 6,434 13% 7,661 -5% Total Expenses 6,007 4,889 23% 6,148 -2% Other Income 15 6 171% 9 60% EBITDA 1,283 1,550 -17% 1,522 -15% EBITDA Margin (%) 17.68 24.09 19.86 Depreciation 228 227 1% 224 2
Slide 9: Ardent Steel Limited Standalone - Profit & Loss
Ardent Steel Limited Standalone - Profit & Loss Particulars (in Million) Q1FY20 Q1FY19 YoY (%) Q4FY19 QoQ (%) Net Sales 734 516 42% 1,054 -30% Total Expenses 558 440 27% 904 -38% Other Income 0 1 -92% 2 -94% EBITDA 176 77 127% 152 16% EBITDA Margin (%) 23.93 14.98 14.37 Depreciation 32 28 15% 35 -9%
Slide 10: Godawari Green Energy Limited - Profit & Loss
Godawari Green Energy Limited - Profit & Loss Particulars (in Million) Q1FY20 Q1FY19 YoY (%) Q4FY19 QoQ (%) Net Sales 340 252 35% 229 10% Total Expenses 39 36 8% 13 177% EBITDA 302 216 40% 216 0% EBITDA Margin (%) 88.57 85.74 94.27 Other Income 2 2 0% 19 -89% Depreciation 74 78 -5% 74 5% Finance Cos
Slide 11: FY19 Return & Liquidity Ratios
FY19 Return & Liquidity Ratios Unit Standalone Ardent GGEL Consolidated RoE % 22% 40% -2% 22% RoCE % 17% 26% 7% 17% BVPS INR 285 130 104 392 Net Debt to EBITDA x 2.07 1.23 5.87 2.32 Net Debt to Equity x 1.20 0.82 1.84 1.38 Interest Coverage x 3.42 5.12 1.43 3.15 10
Slide 12: 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 13: Global Tailwinds
Global Tailwinds International Market o Despite weakening in finished steel prices, Iron ore prices have spiked from $65 per ton to over $120 in international market due to disruption in Vale, Rio, BHP mines in 2019. The iron ore prices have recently cooled down to around $108. o Shortage of iron or
Slide 14: 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 15: 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 16: Investor Presentation
HIRA- GODAWARI POWER & ISPAT INVESTOR PRESENTATION
Slide 17: 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 18: 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 19: 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 1,762 FY16 FY17 FY18 FY19 Q1FY20 Based on consolidated numbers 18
Slide 20: 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 Started • c.75% of total coal sourced from long term linka
Slide 21: Captive mining leading to a huge raw material costs saving
Captive mining leading to a huge raw material costs saving 4,346 4381 3,500 3,200 3,000 2,750 2,600 2,310 2,181 2,050 2053 1,800 FY15 FY16 FY17 FY18 FY19 Q1FY20 Market Price of Iron Ore Captive Ore Landed Cost 20
Slide 22: Improving liquidity ratios
Improving liquidity ratios 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 8.09 8.14 2.13 2.05 1.91 1.94 7.07 1.38 1.27 3.42 3.11 2.32 1.95 FY16 FY17 FY1
Slide 23: 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 the scheduled Debt Repayment Schedule repayment in FY19 GPIL (Standalone) ASL GGE 2,430 1,303 1,032 1,123 330 255 255 65 25 49 1,161 259 64 383 752 908 819 839 FY 19 FY 19 AR FY 20 FY 20 AR FY 21 FY 22
Slide 24: 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 25: 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 26: 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 27: 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 28: 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 29: 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 30: 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 31: 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 32: 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 33: 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 34: 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 35: 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 36: 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 37: 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 38: Thank you
Thank you i SODA HIRA- | GODAWARI POWER & ISPAT a7
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