JSW Steel- one of India’s largest steel producers announced its yearly results for FY’20 today. Overcoming the challenges, the company is operating currently at 85% capacity utilization. SteelMint attended the investor conference call and below are the key highlights of it –
Crude steel output down by 4 % in FY’20- JSW Steel’s crude steel production decreased by 4% to 16.06 MnT in FY’20 implying 97% of FY 20 guidance despite COVID-19 related impact. Meanwhile in FY19 the same stood at 16.69 MnT. In Q4 FY’20, the same stood at 3.97 MnT, marginally down by 1% as compared with 4.02 MnT in the previous quarter.
Saleable steel sales decreased by 4% in FY’20- The producer’s saleable steel sales declined by 4% to 15.08 MnT in FY’20 as against 15.76 MnT in the previous fiscal. The saleable steel sales was down by 8% to 3.70 MnT in Q4 FY’20 in comparison with 4.03 MnT in Q3.
Steel exports surge by 30% in FY20– Steel exports stood at 3.12 MnT in FY20, up by around 30% Y-o-Y to mitigate the headwinds in the domestic market.
Export volumes will be higher in Q1FY21– Company officials shared that the export proportion will remain higher in the first quarter of this fiscal since Indian demand will take a longer time to recover. Also domestic supply is an issue since only a few players can operate due to the COVID-19 pandemic.
Company’s domestic sales witnessed decline in FY20– Sales volumes decreased by 11% to 11.78 MnT in FY20 as compared to 13.19 MnT in previous fiscal. Domestic sales witness decline since the impact of COVID-19 related lockdown in the latter half of March 2020 hit the domestic demand.
Steel inventories over 1 MnT- On 1st Apr’19 company inventory levels were 100 thousand tones which reached 225 thousand tones over Apr’19. Thus at present current inventory levels are approx 1.16 MnT in the entire system across all locations. Also, inventories of flat steel are higher as compared to long products.
JSW Steel coated products performance– During the quarter, JSW steel coated products registered the production volumes of 0.44 MnT and sales volume by 0.47 MnT. In FY20 production was at 1.77 MnT.
Captive iron ore production to increase sharply – Volume from operational captive iron ore mines stood at 4.11 MnT in FY20. Preferred bidder for 4 Iron Ore mines in Odisha with combined reserves of over 1 BnT – to boost strategic security of key raw material resources. Company expects to ramp up iron ore production from its existing captive Karnataka mines and also start production from remaining mines in Karnataka which would add up 7 MnT in FY21. Adding up output from recently won mines in Odisha, the company plans to have captive iron ore production of 21 MnT in FY21.
Coking coal prices are likely to remain flat – In Q4 coking coal prices stood around USD 141-142/MT CFR basis and are expected to remain flat in next quarter.
Company’s operating EBITDA down by 32% in FY’20- The Company’s standalone operating EBIDTA stood at INR 12,517 Cr in FY’20 plunged by 32% against INR 18,513 Cr in the preceding fiscal.
Current market trends – Projects that have picked up momentum recently include – road, metro, irrigation, transmission towers , PEB, solar projects etc. Except regions like Mumbai, Pune, Ahmedabad which are operating with comparatively lower manpower; other regions are having better manpower availability for running steel units.
Dolvi capacity expansion delayed to H2 FY21- Doubling steelmaking capacity at JSW Steel Dolvi from 5 MnT pa to 10 MnT pa to enhance the capacity of flat products portfolio has been delayed to H2 FY21 due to the issues of migrant workers owing to the pandemic. Earlier it was scheduled for H1 FY21.
8 MnT pellet plant commissioning is scheduled by Q2 FY21. Installing Second line of 1.5 MnTPA coke oven battery along with CDQ, commissioning is expected during H2 FY21.
JSW Steel aims 16 MnT crude steel output in FY21: JSW Steel plans to produce 16 MnT crude steel output in this fiscal against last year’s production of 16.06 MnT. The company has set a sales guidance of 15 MnT for FY21.
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