Godawari Power & Ispat (GPIL) Q4 09/10 earnings summary

Executive summary

• FY10 gross revenue was Rs 832.39 crore, down 28% YoY; lower steel realizations weighed on results, while captive iron ore mining lifted EBITDA margin to 16.18% from 12.15%.

• Standalone PAT was Rs 51.40 crore; consolidated revenue was Rs 826.38 crore and consolidated PAT was Rs 56.03 crore.

Financial highlights

• Standalone net sales were Rs 776.43 crore vs Rs 1,035.54 crore; EBITDA Rs 125.63 crore vs Rs 125.85 crore; PBT Rs 61.97 crore vs Rs 65.26 crore.

• Standalone PAT of Rs 51.40 crore compared with Rs 57.36 crore; EPS was Rs 18.31 vs Rs 20.43.

• Consolidated total revenue was Rs 826.38 crore vs Rs 1,103.39 crore; EBITDA Rs 134.51 crore vs Rs 134.31 crore; PAT Rs 56.03 crore vs Rs 61.46 crore.

Outlook and guidance

• Ari Dongri iron ore mining began in May 2010; Boria Tibu had received clearances and was expected to begin production during FY11, targeting full iron ore self-sufficiency.

• The 600,000 MTPA Siltara pellet plant began commercial production; Ardent Steel’s 600,000 MTPA pellet project was expected to start in H1 FY11 after delays.

• The 20 MW biomass power plant was delayed by equipment supply; a 1,200 MW subsidiary power project awaited regulatory approvals and fuel linkages.

• Steel billet and ferro-alloy output may rise if power-sale economics become less favorable; commercial power sales were to continue while realizations remained robust.