Jindal Steel and Power (JSPL) reported a consolidated loss of Rs 421 crore for the three months to June.
Jindal Steel and Power (JSPL) reported a consolidated loss of Rs 421 crore for the three months to June, smaller than the Rs 1,240 crore loss posted in Q1FY17. However, the consolidated ebitda margin rose 200 basis points year-on-year to 22%. Ravi Uppal – managing director and Group CEO, JSPL, told Anupam Chatterjee, steel realisations are better and could sustain owing to strong demand. Uppal said JSPL intends to restructure its foreign-currency denominated debt of Rs 13,000 crore.
JSPL’s performance in Q1FY18 do not look as good when compared with Q4FY17.
The industry trend is that the steel sector in India always performs better in the final quarter because seasonal factors play a role. We have a positive outlook for steel since global demand for the commodity is growing at around1.8%, while in India, it is growing at 5-6%. Global steel prices are higher than in India, therefore we can safely expect an uptick in domestic prices.
What is the company’s debt at the end of June?
JSPL’s debt has risen marginally due to some additional working capital needs for the Angul steel plant blast furnace. The company’s debt now stands at about Rs 45,900 crore, up from Rs 45,500 crore at the end of March 31, 2017. Of this, about Rs 13,000 crore is foreign currency debt while JPL, a subsidiary of JSPL, has a debt of about `7,800 crore. The balance amount is owed by JSPL.
How does the company plan to pare debt?
Regular servicing of debt depends on Ebitda generation. On a consolidated basis, JSPL’s Ebitda has gone up by 33% to Rs 1,353 crore in the quarter. You can expect us to announce the restructuring of foreign debt very soon.
What is your outlook on the price realisation for steel products?
We export a significant quantity of steel pellets to European countries. On a weighted average basis, the price realisation of stell pellets is Rs 4,500 – Rs 4,600 per tonne. With global demand on the rise, we anticipate rates to sustain.
What were the reasons for the good performance of the power segment in the quarter?
Of the 3,400 MW capacity of our Tamnar plant, we have power purchase agreements of 1,000 MW with Chattisgarh, Tamil Nadu and Kerala. The plant load factor of the unit has increased by more than seven percentage points in the quarter to nearly 43%. Power generation has increased to more than 3,100 million units (MU) from 2,170 MU in the same quarter a year ago. There was robust demand of power in the southern states of Telangana and Tamil Nadu in the spot market, owing to low rainfall in this region, where we sold electricity at Rs 3.30- Rs 3.50 per unit.