India: JSPL's production increases 1% q-o-q; sales decline by 9% in Q1FY24

Jindal Steel & Power Limited (JSPL) has posted a growth of 1% in production against the last quarter, while sales dropped by 9% in Q1FY'24 (Apr-June), SteelMint learnt from the company's investors call.

The company informed that they have commissioned its state-of-the-art pellet plant in Angul. Also, they have signed the mining leases for Gare Palma IV/6 and Utkal C coal blocks and are awaiting few clearances before the production can be started.

The company utilised CAPEX amounting to INR 1,900 crores in the Angul plant. The company plans to use INR 5,600 crores (approximated) in CAPEX for FY24, as per the company's investor presentation. In addition, there are plans to increase the company's crude steel capacity by 12.9 mtpa in the current fiscal. They are also deliberating on how to coalesce green steel tech under the current capex plans.

Update on projects:

• The company will be commissioning a 5.5 mtpa hot strip mill (HSM) at Angul by Q3FY24.
  
  
• Commissioning of slurry pipeline, and pellet plant- II at Angul are expected around Q1 and Q4 of FY25, respectively.
  
  
• Furthermore, the company's intent is to get BOF - II, ASU, Coke oven, RMHS, BF - II, and ACPP - II commissioned by Q2FY25. Meanwhile, commissioning of BOF - III, and DRI - II are planned for Q4FY25. The CAPEX for this expansion shall be around INR 15,900 crores.
  
  

Other highlights:

Production rises q-o-q: The company's production rose by 1% q-o-q to 2.04 mnt in Q1 as against 2.02 million tonnes (mnt) in the previous quarter.

Steel sales fall q-o-q: Steel sales stood at 1.84 mnt in Q1, down 9% from 2.03 mnt in the preceding quarter. Exports accounted for 10% of sales in Q1.

EBITDA up q-o-q: The increase in EBIDTA in Q1 was driven by the overall cost reduction in steel production which was offset by lower volumes. Adjusted EBITDA grew by 22% on the quarter to INR 2,665 crore in Q1 as against INR 2,178 crore in the previous quarter.

Operational costs: The cost of steel melting shop (SMS) increased by 2% primarily driven by higher coking coal prices. However, the overall costs went down by 2% owing to use of captive iron ore.