Jindal Steel & Power Ltd (JSPL) financial performance for the second quarter ended 30th September 2009 has not been as encouraging as expected. Net Profit on consolidated basis increased by just 6.05 % (YoY) at Rs. 808.36 crore. But what was more disappointing was that consolidated net sales dropped 14.48% at Rs.2445.28 crore.
DRI and pig iron production rose 5.01% but sales was down 21.94%. Steel products production grew 32.31% but sales was up by a marginal 2.14%. Net realisation from sale of steel products dropped during the quarter mainly due to drop in steel prices and this affected the overall performance. Steel prices on a YoY are down 43%. Production of power rose 2.57% at 701 kWh. And it is this division which really helped the company shore up the performance – sales was up 21.88%, which was 36% of the overall net sales earned by the company for Q2FY10. But net profit from the power unit was at Rs.514.71 crore, which was 64% of the net profit earned in current Q2. Clearly, power is what makes the company powerful today.
PLF (Plant Load Factor) was down at 84% in current Q2 compared to 96% in Q1FY10. This was because it two units were shutdown and due to the monsoon, power generation was lower. So this performance of the power unit could have been much higher than what it has come in Q2.
The power unit, Jindal Power is a wholly-owned subsidiary of JSPL and this company is planning on an IPO in early Jan 2010, to partly fund its 2,400 megawatt superthermal power project in Chhattisgarh. It already has 1000 MW operational. It has 10 units of 135 MW each of which the first unit would go on stream in January 2010 and then one unit every two months. It is also expanding its capacity by another 2400 MW which is scheduled to get operational in 2012-13. So by the end of 2013, Jindal Power will have 4750 MW.
Second half is expected to be better as the two units which were shutdown have re-opened. Realisations in steel are expected to be more volume driven. Stay invested.
DRI and pig iron production rose 5.01% but sales was down 21.94%. Steel products production grew 32.31% but sales was up by a marginal 2.14%. Net realisation from sale of steel products dropped during the quarter mainly due to drop in steel prices and this affected the overall performance. Steel prices on a YoY are down 43%. Production of power rose 2.57% at 701 kWh. And it is this division which really helped the company shore up the performance – sales was up 21.88%, which was 36% of the overall net sales earned by the company for Q2FY10. But net profit from the power unit was at Rs.514.71 crore, which was 64% of the net profit earned in current Q2. Clearly, power is what makes the company powerful today.
PLF (Plant Load Factor) was down at 84% in current Q2 compared to 96% in Q1FY10. This was because it two units were shutdown and due to the monsoon, power generation was lower. So this performance of the power unit could have been much higher than what it has come in Q2.
The power unit, Jindal Power is a wholly-owned subsidiary of JSPL and this company is planning on an IPO in early Jan 2010, to partly fund its 2,400 megawatt superthermal power project in Chhattisgarh. It already has 1000 MW operational. It has 10 units of 135 MW each of which the first unit would go on stream in January 2010 and then one unit every two months. It is also expanding its capacity by another 2400 MW which is scheduled to get operational in 2012-13. So by the end of 2013, Jindal Power will have 4750 MW.
Second half is expected to be better as the two units which were shutdown have re-opened. Realisations in steel are expected to be more volume driven. Stay invested.
Source: Internet (By S P Tulsian)
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