JSPL Pins Hopes on Bet­ter Earn­ings to Pare Debt by Q4 Co, with 46k-cr debt, also ex­pects fall­ing in­ter­est rates to help

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The Economic Times - - Companies - Rakhi.Mazum­dar @times­group.com

Kolkata: Naveen Jin­dal’s flag­ship com­pany JSPL is pin­ning its hopes on im­prove­ment in earn­ings in its steel and power busi­nesses to pare its .₹ 46,000-crore debt bur­den by the fourth quar­ter of this year.

“We have put a sin­gle-minded fo­cus on re­struc­tur­ing our debt. We ex­pect to see more and more vol­umes com­ing from our newly com­mis­sioned steel plant at An­gul and an im­proved per­for­mance in our power busi­ness,” Ravi Up­pal, group CEO of Jin­dal Steel and Power, told ET. “This should help im­prove EBITDA (earn­ings be­fore taxes, in­ter­est de­pre­ci­a­tion and amor­ti­sa­tion) lev­els and help us re­pay some of our debt. Also, with soft­en­ing of in­ter­est rates, we hope to re­duce our out­stand­ing obli­ga­tions.”

In the first quar­ter of FY18, JSPL’s con­sol­i­dated in­ter­est bur­den was .₹ 900 crore, while on a stand­alone ba­sis it was .₹ 532 crore. Up­pal said JSPL had to bor­row an ad­di­tional .₹ 800 crore to meet en­hanced work­ing cap­i­tal needs at An­gul. How­ever, JSPL’s con­sol­i­dated net debt re­mained at the same level as the pre­vi­ous quar­ter (Q4 of FY17).

Con­sol­i­dated EBITDA went up 33% year-on-year in Q1 of FY18 to .₹ 1,353 crore, with 3% rise in crude steel sales to 1.15 mil­lion tonnes, while stand­alone EBITDA touched .₹ 750 crore, up 14% y-o-y, led by 4% higher steel sales at 0.81 mil­lion tonnes and an 8% jump in pellet pro­duc­tion to 1.64 mil­lion tonnes.

A sig­nif­i­cant im­prove­ment came from JSPL’s power sub­sidiary, JPL, which saw EBITDA touch .₹ 468 crore on im­proved plant load fac­tor of 43% in Q1of FY18 com­pared with 36% a year ago. Among JSPL’s over­seas op­er­a­tions, its Oman steel unit main­tained strong EBITDA of $32 mil­lion in Q1FY18. The group is also plan­ning to double pro­duc­tion of cok­ing coal in Mozam­bique over the next six months. JSPL’s man­aged to nar­row its stand­alone net loss by 36% y-o-y in Q1 FY18 to .₹ 178 crore on a turnover of .₹ 3,832 crore, which grew 8% over Q1 FY17. The com­pany also low­ered its con­sol­i­dated net loss by 66% in Q1 FY18 over same pe­riod a year ago to .₹ 412 crore, even as turnover went up 20% to .₹ 6127 crore dur­ing Q1 FY18. While JSPL posted a cash profit of .₹ 218 crore on a stand­alone ba­sis in Q1FY18, on a con­sol­i­dated ba­sis JSPL reg­is­tered a cash profit of .₹ 453 crore.

JSPLhas man­aged to nar­row its stand­alone net loss by 36% y-o-y in Q1 FY18 to 178 crore

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