Jindal Steel and Power Plans to list JPL in the next one year time horizon

June 5, 2009 · Author: · Category: conference call 

Jindal Steel and Power (JSPL) held a conference call to disucss quarterly and yearly results and future growth plans. Sushil Maroo, Director (JSPL) and Managing Director (JPL) addressed the conference call

Highlights of the call

  • The Debt on the books of JSPL stands at Rs 4900 crore, while the debt on the books of JPL stands at Rs 3200 crore. The combined Cash balance stands at Rs 1300 crore.
  • The company plans to sell very small quantity on iron ore from the Bolivian mines over the period of next 2 months.
  • The Capex plan in JSPL is Rs 2000 crore each for the FY’10 and FY’11. The Capex plan in JPL for the FY’10 is around Rs 600-700 crore and for the FY’11 is around Rs 3000-4000 crore.
  • The total power profits contributed around 70% of the total profits. The management of the company expects this ratio of 70:30 tilted in the favor of power to continue over some more years.

JSPL

  • The raw material cost for the quarter under review includes write-down of high cost coking coal to the tune of Rs 590 crore.
  • Steel products sales are expected to increase to 2 Mt during FY’10 from 1.5 Mt during FY’09
  • For the quarter ended Mar’09 the Average realization was Rs 27000-29000 per tonne for the steel products and around Rs 13000-14000 per tonne for sponge iron
  • On the captive power front the company is planning to add 1350 MW (135 MW X 10) of capacity. From Dec’09 the company plans to commission 135 MW capacity each every 2 months.

JPL

  • JPL has announced further brownfield expansion of 2400 MW (4×600 MW) Power Plant at an estimated project cost of Rs 13600 crore. (US $ 2.83 billion). Order for Boiler Turbine & Generator (BTG) package has been placed on BHEL in December 2008.
  • This project will be completed in stages in the year of 2012 and 2013 and the same will be funded on the basis of 70:30 debt : equity. Debt of Rs 8400 crore will be tied up in due course of time and the equity of Rs 3600 crore will be arranged from internal accruals.
  • The average selling price for Merchant power sales was around Rs 5 + per unit
  • The sustainable Merchant Power rate for the next 2 years is expected to be in range of Rs 4-4.5 per unit.
  • Two Joint Venture Agreements executed with Hydro Power Development Corporation of Arunachal Pradesh (HPDCAPL) for development of 4500 MW Hydro Projects in Arunachal Pradesh
  • The Company plans to have a PLF of 90%+ for the FY’10.
  • Out of the Debt of Rs 3200 in JPL the company has plans to repay debt to the tune of Rs 800 crore by the end of the current Month (May’09).

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