q2 fy’18 - jindal steel and power · mini & other producers grew by 1.8% ... brm 1.0 mtpa...

Q2 FY’18

Industry Update &

Key Performance Highlights

9th November, 2017

DISCLAIMERThis presentation may contain certain forward looking statements concerning JSPL’s futurebusiness prospects and business profitability, which are subject to a number of risks anduncertainties and the actual results could materially differ from those in such forward lookingstatements.

The risks and uncertainties relating to these statements include, but are not limited to, risks anduncertainties regarding fluctuations in earnings, our ability to manage growth, competition(both domestic and international), economic growth in India and the target countries forexports, ability to attract and retain highly skilled professionals, time and cost over runs oncontracts, our ability to manage our international operations, government policies and actionswith respect to investments, fiscal deficits, regulations, etc., interest and other fiscal costsgenerally prevailing in the economy. Past performance may not be indicative of futureperformance. We do not undertake to update our forward-looking statements.

This presentation is not intended, and does not, constitute or form part of any offer, invitation orthe solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwisedispose of, any securities in JSPL or any of it’s subsidiary undertakings or any other invitation orinducement to engage in investment activities, neither shall this presentation nor the fact of it’sdistribution form the basis of, or be relied on in connection with, any contract or investmentdecision. Few numbers in this presentation are purely indicative & provisional and could changelater.

2

OUTLOOK

Q2 FY’18

INDUSTRYDEVELOPMENTS

BRIEF BACKGROUND OPERATIONALPERFORMANCE

PRESENTATION OUTLINE

3

Source: Ministry of Finance 4

ElectricityMining

India: IIP exhibited an uptickFactory out put rose to 9 month high at 4.3% in Aug’17

Manufacturing

3.2%

0.3% 0.4%

4.5%

9.4%

April '17 May '17 June '17 July '17 Aug '17

3.2%

2.6%

-0.5% -0.3%

3.1%


5.4%

8.3%

2.1%

6.6%

8.3%


Overall IIP Trend

3.4%

2.9%

-0.2%

0.9%

4.3%


Source: WSA 5

80%

77%

74%

73%

70%69% 69%

71%

72%

74%

72%

73% 73% 73%74%

2011 2012 2013 2014 2015 2016 Jan '17 Feb '17 March '17 April '17 May '17 June '17 July '17 Aug '17 Sept '17

5%

CY ‘17

Global Steel Capacity Utilization improved during CY 17Capacity utilization has recovered due to capacity cut in China

Source: WSA 6

World Crude Steel Production firmed up led by higher output from major producers

799

808

105.1

104.8

89

96

1615

1629

0.8 % 1200

1267

5.6%

601

639

6.3%

78.4

78.30.2 %

71

75

CY ‘15

No #1 China

No #2 Japan

No #3 India

CY ‘16

0.3%

7.4 %

9 Month CY ‘16 9 month CY ‘17

5.7%

World

1.2 %

India is all set to become 2nd biggest steel producer in the world

7

Steel industry’s contribution to

National GDP

Nearly 2%

Steel Industry’s contribution to

Index of Industrial Production (IIP)

6.68%

Employment by the steel industry

Current Market value of the Indian

Steel Industry

$75 bn

Total Investment

expected till 2025-

2030

$187 Bn

India’s per capita steel consumption is expected to increase to 158 Kg in 2031 from current 61 Kg

> Indian steel industry continues to capitalize on its competencies to invest further.

Domestic Steel Industry continues to grow and play major role in Nation Building

116144

300

FY '16 FY '20e FY '31 (GoI Vision)

Crude Steel Capacity Projection

81.5

230

FY '16 FY '31e

Finished Steel Consumption

In Million MT (Mt)

Source: WSA

Source: JPC 8

Indian Steel Scenario : Apr-Oct FY ’18 Major Highlights

April-Oct FY ‘18 : Other Highlights

> Crude Production of Primary Producers grew by 6.7% (y-o-y) (28.44Mt), while the crude production of Mini & Other Producers grew by 1.8% (y-o-y) only.

> India remains the Net Exporter of steel during H1 FY ’18

> Finished Steel Demand : o Over all Steel consumption of finished steel grew by 4.3%o Finished Carbon Steel Consumption grew by 4.2%

(Qty : Mt) FY ‘17 H1 FY ‘18

Domestic Steel Industry Qtychange

Qtychange

(y-o-y) (y-o-y)

Crude Steel Production 97.4 8.50% 49.8 4.5%

Finished Steel (Non Alloy+Alloy)

Import 7.23 -38% 4.3 20%

Export 8.25 102% 4.8 60%

Real Consumption (Demand) 83.65 2.60% 42.85 4.3%

OUTLOOK

Q2 FY’18


BRIEF BACKGROUND OPERATIONALPERFORMANCE


9

INDUSTRY UPDATESTEEL SECTOR

10

11Source: Ministry of Steel/ MECON

50.5 Mt

Current Demand (FY '16)

8.2 Mt

Construction & InfrastructureSteel/O&G/Highway/Bridge/Airport/

ports/Urban Infra/PreFab buildings/Power/

Real Estate(resid+Industrial)

Automotive

Projected Demand (FY31)

> Major steel demand will come from Infrastructure & Construction sector > JSPL having its requisite product mix will likely to be benefited most.

Indian domestic Finished Steel Demand will likely to remain healthy Sector Wise Finished Steel Consumption Projection

138 Mt

28 Mt

7%

9%

Growth CAGR (%)

2.4 MtPackaging and OthersPetroleum, non-petroleum, LPG Gas Cylinders

6 Mt

18 Mt

Engineering & FabricationCapital Goods/Consumer Durable/Electrical Goods

/Tube /Wire/Pressure Vessels/Defence/General Fabrication/General Enginnering

50Mt8%

2.4 MtOther TransportRail lines, Wagons Coaches, Ship Building, Coastal

8 Mt9%

7%

81.5 MtTotal 230 Mt8%

Per Capita Steel Consumption 61 1587%

Source: Platts/Steel Mint 12

International Iron Ore & Pellet Price Trend

78

92

69

5759

64

3/J

an/1

7

24

/Jan

/17

14

/Feb

/17

7/M

ar/1

7

28

/Mar

/17

18

/Ap

r/1

7

9/M

ay/1

7

30

/May

/17

20

/Ju

n/1

7

11

/Ju

l/1

7

1/A

ug/

17

22

/Au

g/1

7

12

/Sep

/17

3/O

ct/1

7

24

/Oct

/17

IO Fines ($/MT) CFR China

International IO Fine : > IO Fine prices Decreased by 19% since April ‘17

International Pellet: > IO Pellet Prices Increased by 27% Since April ‘17

97

81

103

121

120

3/A

pr/

17

17

/Ap

r/1

7

1/M

ay/1

7

15

/May

/17

29

/May

/17

12

/Ju

n/1

7

26

/Ju

n/1

7

10

/Ju

l/1

7

24

/Ju

l/1

7

7/A

ug/

17

21

/Au

g/1

7

4/S

ep/1

7

18

/Sep

/17

2/O

ct/1

7

16

/Oct

/17

30

/Oct

/17

IO Pellet ($/MT) CNF China

Source: Platts/Steel Mint 13

Domestic Iron Ore Trend

1200

1100

1300

1350

1400 1400 1400

1000

1050

1100

1150

1200

1250

1300

1350

1400

1450

IO Fines (Rs/MT)

2300

2825

2550

2800 2800 2800 2800

2200

2300

2400

2500

2600

2700

2800

2900

IO Lumps (Rs/MT)

Source: Platts, Argus 14

International Coal : Price Trend

International Coal Prices trend

(From April ‘17 till 7th Nov’17:)

> Steam Coal RB1 Coal : Up by $16/MT (FOB S. Africa)

93

232

186164 158

260

171146

166197 203

183 180

Ap

r-1

6

Oct

-16

Jan

-17

Feb

-17

Mar

-17

Ap

r-1

7

May

-17

Jun

-17

Jul-

17

Au

g-1

7

Sep

-17

Oct

-17

Late

st

Prime Hard Coking Coal ($/MT FOB Australia)

52

8386

8379 77

72 72 72

8792 91

94A

pr-

16

Oct

-16

Jan

-17

Feb

-17

Mar

-17

Ap

r-1

7

May

-17

Jun

-17

Jul-

17

Au

g-1

7

Sep

-17

Oct

-17

Late

st

Steam Coal RB1 ($/MT FOB S Africa)

International Coal Prices trend

(From April ‘17 till 7th Nov’17:)

> Prime Hard Coking Coal: down by $80/MT (FOB Australia)

INDUSTRY UPDATEPOWER SECTOR

15

Source: IEX 16

Major Updates: Exchange Prices

2.372.39

2.46 2.71

2.9

2.592.45

3.07

4.084.08

2.242.11

2.4

2.69

2.06

2.23

2.1 2.082.35

2.4

2.252.14

2.59

2.31

2.2

2.472.25

2.18

2.2 2.39

3.4

2.89

2.54 2.45

1.3

1.8

2.3

2.8

3.3

3.8

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

RTC Power Exchange Prices – W3 Area – Regional Periphery Prices (Rs./kWh)

2017 2016 2015

Frequency Distribution of Capacity Sold over IEX

108

267

2,314

1,308

584

345 329

71 10 9

-

500

1,000

1,500

2,000

2,500

Frequency Distribution of Capacity sold over IEX at various Prices

MW

Source: IEX 17

OUTLOOK

Q2’FY18


BRIEF BACKGROUND


OPERATIONALPERFORMANCE

18

Steel PowerMines & Minerals

Global Ventures

Current Capacities – Domestic & Global

Business Segments

*Domestic**1000 MW Divestment announced

Construction Material &

Solution

6.1 MTPA Steel* 3.11 MTPA*

Iron ore IPP – 3400MW**CPP – 1634 MW

2 MTPA SteelCoal Mines

CementRoad solutions

LGS

19

Capacity in deail

Iron Making

(9.95 MTPA)

BF 5.33 MTPA

DRI 3.12 MTPA

HBI 1.50 MTPA

Liquid Steel

(8.10 MTPA)

SMS 8.10 MTPA

Finished Steel

(6.55 MTPA)

WRM 0.60 MTPA

RUBM 0.75 MTPA

MLSM 0.60 MTPA

Plate Mill 2.20 MTPA

BRM 2.4 MTPA

Steel Capacities across Life Cycle

*BoF in Angul 2.5 MTPA - To be commissioned*BRM in Angul 1.4 MTPA - To be commissioned

20

Capacity in deail

Raigarh(Chhattisgarh)

SMS 3.6MTPA

BF 2.125 MTPA

DRI 1.32 MTPA

Plate Mill 1.00 MTPA

RUBM 0.75 MTPA

MLSM 0.60 MTPA

CPP 824 MW

Angul

(Odisha)

SMS 2.5 MTPA

*SMS 2.5 MTPA

DRI 1.8 MTPA

BF 3.2 MTPA

CGP 225,000 Nm3/Hr

Plate Mill 1.2 MTPA

*BRM 1.4 MTPA

CPP 810 MW

Barbil

(Odisha)

Pellet Plant

9 MTPA

Patratu (Jharkhand)

WRM 0.60

MTPA

BRM 1.0 MTPA

Oman

SMS 2.0 MTPA

HBI 1.5 MTPA

BRM 1.4 MTPA

JPL

Tamnar 3400 MW

Mining

Iron Ore 3.11

MTPA

Coal Overseas

6.60 MTPA

Detailed plant wise capacities

Power Hot Metal Liquid Steel Finished Steel

*To be commissioned

21

Standalone Q2 FY 18 –Snapshot of Key Financials (Figures in Rs. Crores)

Particulars Q2FY18 Q1FY18 Q2FY17 %QoQ %YoY

Total Revenue 3,668 3,832 3,488 -4% +5%

EBITDA 784 750 531 +5% +48%

EBITDA % 21% 20% 15%

Depreciation 496 481 524 +3% -5%

Finance Cost 578 532 654 +9% -12%

PBT (Before Exceptional) (290) (263) (647) -10% +55%

Exceptional 150 -- --

Profit/(Loss) Before Tax (440) (263) (647) -67% +32%

Profit/(Loss) After Tax (255) (178) (407) -43% +37%

Cash Profit 408 218 (123) +87% +146%

22

Angul

Tamnar

RaigarhCaptive power projects (within JSPL)

ProjectCapacity

(MW)Fuel Configuration Status

DCPP, Raigarh 540 Coal 4x135 MW Operational

JSPL, Raigarh 284Coal & waste heat

1x24 MW (Waste heat)

2x55 MW 6x25 MW

Operational

Angul, Odisha 810 Coal 6 x135 MW Operational

Independent Power Projects (IPP)

ProjectCapacity

(MW)Fuel Configuration Status

Tamnar 1* 1,000 Coal 4x250 MW Operational

Tamnar 2 2,400 Coal 4x600 MW Operational

IPP CPP

One of the largest thermal portfolios in India

JSPL - Power Capacities

*Divestment announced 23

96.43% subsidiary of JSPL

JINDAL POWER LIMITED

EUP -I1000MW (4 X 250)

EUP -II1200MW (2 X 600)

EUP -III1200MW (2 X 600)

24

Project Buyer Type

Period Quantum (MW)From To

Tamnar II

(Phase 1)Tamil Nadu

Long Term Feb-14 Sep-28 400

Tamnar I Medium Term Sep-17 Aug-19 200

Tamnar II

(Phase 1)KSEB

Long Term Jun-16 May-41 200

Tamnar II

(Phase 1)Long Term Oct-17 Sep-42 150

Tamnar II

(Phase 1)Chhattisgarh

Long Term After commercial operation of Unit and for complete life

of plant

60

Tamnar II

(Phase 2)Long Term 60

PPA Arrangements

Over 30% of total capacity tied up *

* Out of 3400 MW (IPP) 25

Tamnar-I, 1,000 MW (EUP I)

In the interim, coal sourced through – market purchase and e-auction

Bilateral/short term/merchant

TNEB – 200 MW

Open access available

Tamnar-II - 1,200 MW (EUP II)

Long term linkage from Mahanadi Coal Limited (MCL) and South Eastern Coalfields Limited (SECL)

TNEB – 400MW

CSEB – 60MW

KSEB – 200MW

KSEB – 150MW

Open access available

Tamnar-II - 1,200 MW (EUP III)

Market purchase and e-auction

CSEB – 60MW

Open access to be finalised against PPAs

FSA

PPA

Evacuation

Raw materials, transmission & PPAs in place for achieving higher PLF

Key Contractual Arrangements for JPL

26

27

S.N Party Type Period of Power SupplyQuantum

(MW)

1 BEST-DISCOM MT1st Apr’18 to 31st Mar’23

(5 years)300

2 Bangladesh ST 1st Dec’17 to 31st Dec’18 500

3 Bangladesh ST1st Aug’16 to 31st Dec’18

(To be extended)250

4 Bangladesh LT 1st Jan’19 to 31st Dec’32 500

5 Bihar-DISCOMs MT 1st Dec’17 to 31st Dec’18 300

6 IPCL-DISCOM MT1st Jan’18 to 31st Dec’22

(5 years)60

Upcoming Medium & Long Term Tenders

JPL Q2 FY18 – Snapshot of Key Financials (Figures in Rs. Crores)


Net Sales 878 1,079 734 -19% +20%

EBITDA 345 468 182 -26% +89%

EBITDA % 39% 43% 25%

Depreciation + Amortization 377 373 354 +1% +7%

Interest 227 227 179 -- +27%

Profit/(Loss) Before Tax (190) (62) (246) -204% +23%


Cash Profit 187 310 107 -40% +74%

Generation (MU) 2,427 3,186 2,313 -24% +5%

28

Developing a 3 MTPA coal

mine in Mozambique’s coal-

rich Moatize region

Mozambique, Africa

JSPL’s Kiepersol Colliery produces Anthracite

coal, sold domestically and internationally.

South Africa, Africa

Acquired 60.3% stake in

Wollongong Coal

Australia

1.5 MT HBI , 2 MT SMS Plant &

1.4MTPA Rebar Mill – an

Integrated Steel Plant

Shadeed, Oman

Summary of International Operations

29

Oman

Holding structure for global operations

Jindal Steel & Power Ltd

Listed Operating Entity in India

Australia

Coking Coal

South Africa

Anthracite Coal

Mozambique

Thermal/ Coking Coal

Jindal Steel & Power (Mauritius) Ltd

Holding company for overseas business

2 MTPA Steel plant

30

Consolidated Q2 FY 18 –Snapshot of Key Financials


Total Revenue 6,125 6,127 5,029 -- +22%

EBITDA 1,373 1,353 848 +1% +62%

EBITDA % 22% 22% 17%

Depreciation 998 962 999 +4% --

Finance Cost 927 901 872 +3% +6%

PBT Before Exceptional (550) (510) (1,021) -8% +46%

Exceptional 150 -- -- -- --

Profit/(Loss) Before Tax (699) (510) (1,021) -37% +32%


Cash Profit 299 452 (22) -34% +1459%

(Figures in Rs. Crores)

31

OUTLOOK

Q2 FY’18


BRIEF BACKGROUND


OPERATIONALPERFORMANCE

32

JSPL Performance Highlights

India’s largest Blast Furnace commissioned at Angul.

JSPL’s Standalone EBITDA increased by 48% Y-o-Y for Q2FY18

JSPL’s Consolidated Steel Production for Q2FY18 was 1.32 Million Tonne up 14% YoY (1.16 Million Tonne in Q2FY17)

JSPL’s Consolidated EBITDA increased by 62% Y-o-Y for Q2FY18

Oman ‘s EBITDA increased by 316% Y-o-Y in 2QFY18

33

JPL Performance Highlights

Increase in Generation by 5% Y-o-Y in 2QFY18

Increase in turnover by 20% from Rs 734 Cr in 2QFY17 to Rs 878 Cr in 2QFY18

Increase in EBITDA by 89% Y-o-Y in Q2FY18

Rating Agency ICRA has reaffirmed A- rating for JPL

Extension of TNEB Medium Term PPA beyond August 2017

34

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

0.84 0.88 0.840.91 0.90 0.89

0.35 0.28 0.31

0.39 0.36 0.43

Jindal Shadeed JSPL

1.301.19 1.16 1.15

Consolidated Steel Production

(Figures in Million Tonnes)

1.26

Consolidated Steel Sales

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

0.78 0.81 0.84 0.920.81 0.83

0.33 0.27 0.32

0.390.34

0.43

Jindal Shadeed JSPL

1.311.11 1.08 1.16 1.15

35

1.32 1.27

Key Customers & Adding…

36

For any information please contact: -

Mr. Nishant Baranwal – Head, Investor RelationsTel : +91 11-41462198Mobile:+91 8800690255Email: - [email protected]

Ms. Shweta Bagaria – Assistant Manager, Investor RelationsTel: +91-124-6612073Mobile: +91 95995 53717Email: [email protected]

37

mailto:[email protected]



THANK YOU

38

q2 fy’18 - jindal steel and power · mini & other producers grew by 1.8% ... brm 1.0 mtpa...

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