Quarter ended December 2020 showed recovery signs for the entire steel industry in India with utilisation levels as well as domestic demand rising m/m. However, the steel industry continues to struggle with raw material scarcity amplified by exponential rise in domestic and international iron ore prices.
Rising volumes and profits, lowering debt
- Jindal Steel & Power (JSPL) reports consolidated EBITDA of Rs. 4252 crore.
- Standalone EBITDA rises to Rs. 3908 crore.
- JSPL consolidated PAT (continuing operations) of Rs. 2432 crore.
- Net debt reduced by approximately Rs. 10 298 crore in 9 months FY21 to Rs. 25 621 crore.
JSPL Standalone 3QFY21 performance
- Gross revenue: Rs. 9906 crore.
- Net revenue Rs. 8738 crore.
- EBITDA: Rs. 3908 crore.
- Steel (including pig iron) production: 1.93 million t.
- Steel (including pig iron) sales: 1.87 million t.
Jindal Power Ltd (JPL) 3QFY21 performance.
- Turnover: Rs.1393 crore.
- EBITDA: Rs. 303 crore.
- Power generation: 4180 MU.
During 3QFY21, JSPL Standalone reported highest ever steel production volumes (including pig iron) at 1.93 million t (up 20% y/y) and sales of 1.87 million y (up 12% y/y). As domestic demand continued to recover, the company raised its sales within India. This was reflected in declining share of exports for JSPL, which declined to 21% (vs 38% in 2QFY21).
After remaining largely range bound in the prior quarter, on the back of increased raw material prices, 3QFY21 saw long steel prices rising alongside flat steel prices. JSPL Standalone reported gross revenue of Rs. 9906 crore (+31% y/y). Improved product mix and better efficiencies helped JSPL Standalone record EBITDA at Rs. 3908 crore.
During 3QFY21, pellet production increased 3% y/y. External sales of pellets however reduced to 0.4 million t (down 38% y/y) on higher internal consumption as steel volumes continue to ramp up.
3QFY21 also saw JSPL becoming India’s first private company to get the ‘regular supplier’ status from Indian Railways to supply 60 kg 880 grade rails.
Improved demand and coal availability resulted in JPL reporting generation of 4180 million units in 3QFY21.
Higher volumes coupled with lower coal costs led to JPL reporting an EBITDA of Rs. 303 crore (up 18% y/y). This was partially offset by lower realisations. 3QFY21 EBITDA also includes one-time expenses and provision of Rs. 327 crore. JPL continues to generate cash profits of Rs. 366 crore in the reported quarter.
The Ministry of Coal, government of India, has declared JPL as the successful bidder for Gare Palma IV/1 coal mine. Jindal Power Ltd won an auction for Gare Palma IV/1 coal mine at 25% bid premium of the representative price. The mine has peak rated capacity of approximately 6 million tpy. The mine should further strengthen JPL’s raw material security and help reduce costs. The company currently awaits the vesting orders for the mine.
Chirodzi mine produced 872 000 t run of mine (ROM) (up 36% y/y) in 3QFY21. Despite lower realisations, on account of falling coking coal prices, the mine reported EBITDA of US$0.38 million in 3QFY21.
During 3QFY21, Kiepersol mine produced 146 000 t ROM (up 42% y/y). The mine reported EBITDA of US$1.8 million (vs US$1.1 million for 3QFY20).
Both Wongawilli and Russell Vale mines continue to remain under care and maintenance. In the month of December 2020, the development application for the Russell Vale Revised Preferred Underground Expansion Project (UEP) has been approved by the Independent Planning Commission of New South Wales (IPC) subject to certain conditions. Environmental Protection and Biodiversity Conservation (EPBC) referral is in process.
Read the article online at: https://www.worldcoal.com/coal/26012021/jindal-steel-power-releases-financial-results/