Godawari Power & Ispat (GPIL) Q4 05/06 earnings summary

Executive summary

• FY06 gross turnover rose 41% to Rs. 27,075.22 lakh; reported net profit reached Rs. 3,733.33 lakh, including a Rs. 1,483.24 lakh prior-year depreciation write-back.

• First-phase expansion began commercial production during the year, adding capacity across sponge iron, billets, captive power, ferro alloys and HB wires.

• Integrated growth strategy targets 1 million tonnes of production capacity by 2010, supported by captive raw materials, power and rail infrastructure.

Financial highlights

• Standalone sales were Rs. 27,075.22 lakh versus Rs. 19,134.58 lakh; turnover growth was 41% YoY.

• Standalone PBT before extraordinary items was Rs. 2,482.60 lakh versus Rs. 2,619.31 lakh; PAT before the depreciation adjustment was Rs. 2,250.10 lakh versus Rs. 2,410.67 lakh.

• Reported standalone PAT was Rs. 3,733.33 lakh, including the Rs. 1,483.24 lakh prior-year depreciation adjustment.

• Consolidated sales were Rs. 36,217.34 lakh versus Rs. 25,937.18 lakh; consolidated net profit was Rs. 3,832.94 lakh versus Rs. 2,409.80 lakh.

• Finished-goods sales rose 39.44% to Rs. 25,573.61 lakh; electricity sales fell 27.06% to Rs. 325.70 lakh as captive consumption increased.

Outlook and guidance

• Phase II integrated plant, with 260,000 MT sponge iron, 150,000 MT billets and 25 MW captive power capacity, was expected to become operational in 2007.

• Phase I capacity was expected to contribute fully in FY07; higher production and sales volumes were anticipated after the January 2006 commissioning.

• Production capacity target is 1 million tonnes by 2010; a state-government MOU covers Rs. 493 crore of planned steel and captive-power investments.

• Captive coal supply was expected from FY09; iron ore mining was expected to begin in the final quarter of FY07, subject to clearances and mine development.