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