Godawari Power & Ispat (GPIL) Q4 06/07 earnings summary

Executive summary

• FY07 gross sales rose 88% to Rs 50,995 lakh; operational profit reached Rs 8,159 lakh and net profit Rs 5,221 lakh.

• Expansion lifted production and installed capacity, while backward integration and a greater mix of value-added wires remained central priorities.

Financial highlights

• Standalone gross turnover was Rs 50,995.06 lakh versus Rs 27,075.22 lakh in FY06; reported growth was 88%.

• Standalone PBDITA was Rs 8,158.56 lakh versus Rs 3,685.85 lakh; PBT was Rs 5,898.79 lakh and PAT Rs 5,221.20 lakh.

• Excluding FY06's Rs 1,483.24 lakh depreciation-policy adjustment, PAT was Rs 5,221.20 lakh versus Rs 2,250.09 lakh; basic and diluted EPS were Rs 21.41.

• Consolidated gross turnover was Rs 55,087.02 lakh and consolidated net profit Rs 5,414.63 lakh; consolidated EPS was Rs 23.30.

• Carbon-credit sales contributed Rs 525.05 lakh; manufactured-goods sales rose 88%, while electricity sales fell 36% as captive consumption increased.

Outlook and guidance

• Phase II capacities were expected to reach normal production from Q2 FY08, supporting significant growth in production and sales volumes during the year.

• Iron-ore mining was expected to begin after forest clearance; coal-mine development was estimated to require about two years, with operations targeted from FY10.

• Longer-term plans targeted 0.5 million tonnes of steel-wire capacity and finished-steel capacity of 1 million tonnes; future expansion plans were to be finalized.

• Strategy focused on using more sponge iron and billets captively, expanding higher-value wire products, and reducing costs through captive mines and power.