JSPL has continued its growth momentum with increasing volumes and expanding margins in both steel and power sectors. During the quarter ending June 2019, JSPL’s Standalone reported a rise of 17% for steel and related products to 1.57 million tonnes compared to 1.35 million tonnes in the same quarter a year ago. The sales also registered a growth of 16% Year on Year to 1.51 million tonnes. The crude steel production in Standalone also rose to 1.46 million tonnes (up 19% YoY) while the stood at 1.43 million tonnes (20% up YoY).
The revenues for JSPL Standalone stood at Rs. 7,085 crore, which is an increase of 5 % YoY. Thanks to JSPL’s sustained efforts to market and sell value-added and differentiated products coupled with the company’s cost-saving initiatives, it was able to increase its margins to 23 % from 19 % in the Q4 of 2018-19.
The JSPL, on a consolidated level, produced 1.96 million tonnes of steel and related products (up 10% from 1.78 million tonnes in Q1 of 2019) and sold 1.92 million tonnes of steel-related products (up 12% from 1.72 million tonnes in Q1 in 2019).
In terms of crude steel, for the consolidated entity, the company produced 1.85 million tonnes of crude steel on the consolidated level (up 12% from 1.65 million tonnes in Q1 in 2019) and sold 1.84 million tonnes of crude steel (up 14% from 1.61 million tonnes in Q1 in 2019).
Elsewhere, JSPL reported consolidated Revenue of Rs. 9,946 Cr (up 3% YoY) while Consolidated EBITDA (earnings before interest, tax, depreciation and amortisation) increased to Rs.2,173 Cr from Rs. 1,845 Cr (in Q4 OF 2019). Net Debt to EBITDA (trailing basis) at the end of Q1 OF 2020 stood at 4.5 x as compared to 4.7x in Q1 IN 2019. Net Debt for the quarter ending June 2019 was reported at Rs.37,621 crore, which is a net deduction by repayment of Rs. 1,440 crore from the previous quarter.
The JSPL also had a reason to smile as good news arrived from one of its key international ventures. The ramp-up of mines in Mozambique steadily continued this quarter with the mine at Chirodzi producing 614 KT ROM (up 126% YoY) and reporting EBITDA of US$ 5.9 Mn (as compared to just US$ 0.2 Mn in Q1 IN 2019).
This performance assumes significance since globally, the quarter ending June 2019 experienced a contrasting phenomenon in steel, marked by a gradual decline in steel prices against rising iron ore prices. Even in India, the downtrend in steel prices continued across various products for most steel manufacturers, both in long and flat categories. The reducing liquidity in the markets further exacerbated the steel demand during the quarter.
In the last quarter of 2019, JSPL had recorded a jump of 58% in standalone revenue.
JSPL was trading at Rs 104.20 on Wednesday afternoon, up by Rs 9.45 or 9.97% from its previous closing of Rs 94.75 on the BSE. The company’s decision to sell off its Botswana coal mine for $150 million understandably to reduce its debt liability appears to have helped its share prices to jump significantly.