JSW Steel (JSWSTEEL) Q4 15/16 earnings summary

Executive summary

• FY16 faced weak global steel demand, import pressure and compressed spreads; domestic volumes grew 20% YoY, with value-added and special products at 35% of sales.

• Q4 operating EBITDA and steel volumes improved YoY; FY16 net losses reflected exceptional provisions and overseas charges.

• Steelmaking capacity expanded from 14.3 MTPA to 18 MTPA.

Financial highlights

• Standalone Q4FY16 net sales were ₹9,361 crore, operating EBITDA ₹1,774 crore and PAT ₹372 crore; FY16 net sales were ₹36,202 crore, EBITDA ₹5,723 crore and PAT ₹(3,498) crore.

• Consolidated Q4FY16 net sales were ₹10,471 crore, operating EBITDA ₹1,825 crore and PAT ₹171 crore; FY16 net sales were ₹41,217 crore, EBITDA ₹6,073 crore and PAT ₹(742) crore.

• Standalone Q4 gross turnover was ₹10,432 crore; consolidated Q4 gross turnover was ₹11,597 crore.

Outlook and guidance

• FY17 crude steel production guidance was 15.75 Mt, up 25% YoY; saleable steel sales guidance was 15.00 Mt, up 24% YoY.

• FY17 Indian steel demand was expected to grow 6%, supported by public investment, infrastructure awards, policy reforms and a normal-monsoon outlook.

• Growth levers included capacity ramp-up, wider domestic penetration, product-mix enrichment, logistics optimization and operating leverage.

• Planned projects included a Vijayanagar pipe conveyor and reservoir, Tarapur tin-plate mill, and a phased 1.5 MTPA Dolvi coke oven project.