Raipur-based Godawari Power and Ispat Ltd (GPIL) posted gains in steel and iron ore output in the fiscal year 2019-20 as it started direct export of iron ore pellet.
Pellet output gained by 7% y-o-y to 2.69 mn t (highest ever pellet production), with 546,086t, around 40% of GPIL’s total pellet sales, exported in FY’20. Out of 2.69mn t, 1.99 mn t produced by GPIL and remaining 0.69 mn t produced by ASL. For the last quarter FY20, GPIL produced 0.44 mn t and ASL produced 0.17 mn t.
Net profit for FY’20 fell by 32% to INR 1.74 bn from around INR 2.57 bn in 2018-19. Net sales dropped by 1% to INR 32.88 bn as lower sales realizations offset higher sales volume. Cost increase of 5% to INR 26.64 bn also hit profitability.
The company lifted mined iron ore output by 7% to around 1.66 mn t in FY’20. On quarterly premises, iron ore output reached 451,875 in Q4FY20, up as against 449,554 t in Q3 FY20
Billet output increased by 15% to 344,610t and sponge iron output was higher by 8% at 494,955t.
Pandemic affecting performance
Business environment in the ferrous sector remains uncertain and the fiscal performance of GPIL will hinge on the overall economic performance of India.
GPIL is focusing on lifting output of a 67% grade pellet, typically used in DRI-based steelmaking, for exports and self consumption in manufacturing high-grade billet. It also expects its rolling mill, commissioned in February’20, to lift output of value-added steel products. The company has no further capacity expansion plans for FY 21.
The company had shut its steelmaking operations from 24 March-9 April during the nationwide lockdown to control coronavirus infections. Production has been normal since the third week of May. Profitability in April-June quarter will be affected by the lockdown just as profits were hit in the January-March period.
GPIL expects total production across ferrous products to be around 60-90% of normal levels in April-June and resume normal levels from the next quarter.
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