Godawari Power & Ispat (GPIL) Q4 08/09 earnings summary

Executive summary

• FY09 net sales rose 25% to Rs. 1,035.54 crore, while PBT fell to Rs. 65.26 crore and PAT to Rs. 57.36 crore amid weaker second-half prices and higher input costs.

• Strategy shifted toward merchant power sales, reducing billet and ferro-alloy output; iron ore mining began at Ari Dongri, supporting planned input-cost savings.

Financial highlights

• Standalone gross turnover was Rs. 1,162.40 crore vs. Rs. 956.90 crore; net turnover was Rs. 1,035.54 crore vs. Rs. 829.27 crore in FY08.

• Standalone EBITDA was Rs. 125.85 crore vs. Rs. 162.69 crore; PBT was Rs. 65.26 crore vs. Rs. 108.12 crore; PAT was Rs. 57.36 crore vs. Rs. 94.98 crore.

• Consolidated income from operations was Rs. 1,103.39 crore vs. Rs. 811.63 crore; consolidated PAT was Rs. 61.46 crore vs. Rs. 98.65 crore.

• Standalone basic EPS was Rs. 20.43 vs. Rs. 37.18; proposed dividend was Rs. 2.50/share, with total FY09 dividend payout of Rs. 2.94/share.

Outlook and guidance

• Crushing plant (1.2 MTPA) was expected to start in July 2009, pellet plant (0.6 MTPA) in October 2009 and beneficiation plant (1.0 MTPA) in January 2010.

• Iron ore from Boria Tibbu was expected to begin commercial production in October 2009; captive coal mining was targeted for the following financial year, subject to approvals.

• A 20 MW addition to power capacity, from 53 MW to 73 MW, was planned at an estimated Rs. 35 crore; a 1,000 MW thermal project and 300 MW merchant-power first phase were also being pursued.

• Steel capacity expansion toward 1 MTPA and proposed 2 MTPA cement, 1 MTPA clinker and 50 MW power projects were medium- to long-term plans.