JSW Steel (JSWSTEEL) Q4 17/18 earnings summary

Executive summary

• FY18 delivered record crude steel production of 16.27 Mt, up 3% YoY, and consolidated saleable steel sales of 15.55 Mt, up 6% YoY.

• Consolidated revenue from operations reached ₹71,503 crore, operating EBITDA ₹14,794 crore and net profit ₹6,113 crore; all were record annual results.

• Stronger domestic demand, rising value-added product mix and operating efficiencies supported results; planned capex targets 24.7 Mt steelmaking capacity by March 2020.

Financial highlights

• Consolidated revenue from operations ₹71,503 crore, up 18% YoY; operating EBITDA ₹14,794 crore, up 22% YoY; net profit after tax ₹6,113 crore, up 76% YoY.

• Diluted EPS ₹25.71, up 76% YoY; operating EBITDA margin 21.1%, versus 21.9% in FY17.

• Standalone revenue from operations rose 16% to ₹66,234 crore; operating EBITDA increased 19% to ₹13,741 crore and PAT rose to ₹4,625 crore from ₹3,577 crore.

• Consolidated operating cash flow was ₹12,379 crore, versus ₹7,888 crore in FY17; cash used in investing was ₹4,529 crore and financing was ₹8,185 crore.

Outlook and guidance

• Domestic steel demand forecasts for FY19 ranged from 5.5% growth in the World Steel Association estimate to 8.3% in the Joint Plant Committee estimate.

• Global steel demand was forecast to rise 1.8% in 2018; emerging and developing economies excluding China were forecast to grow 4.9%.

• Capacity is planned to expand from 18 Mtpa to 24.7 Mtpa by March 2020, with 3.2 Mtpa of additional downstream capacity.

• A cumulative ₹44,415 crore capex programme spans FY18–FY21; FY18 spend was about ₹4,700 crore, with the remaining ₹39,715 crore planned over the next three years.