Essar Steel India Limited FY 15 Performance Date: 27 th May, 2015 1
1. FY15 Highlights 1.1 Profitability : Top Line grew by 20% Operating Margin increased to 18% from 9% EBIDTA Jumped by 188% PAT- Increase from Rs.(1597) crs. to Rs. 648 crs. 1.2 Over Rs. 6100 crs. funding through : Equity of Rs. 1300 crs. Monetisation of assets of Rs. 4850 crs. 1.3 Long Term Debt has remained constant at Rs. 30,000 crs. 1.4 Dollarization of USD 2.2 Billion completed 1.5 Major Projects completed at competitive capital cost. Peer comparison FY14 2
1. FY15 Highlights 1.6 World Steel Association recognized Essar Steel Hazira for Safety & Health Excellence in 2014 1.7 Operations at both Odisha and Vizag Slurry Pipeline have been stabilized 1.8 Highest ever Production in Plate and Pipe Mill 1.9 Inventory holding of finished steel reduced to half during FY15 1.10 Healthy order book for export of Pellets & Plates for next 2 years and for Pipes for next six months. 1.11 26% of sales from products developed in-house during the last three years including products developed for auto, defense and extra large diameter pipes. 1.12 Significant improvement in Customer satisfaction and Employee Engagement score 3
1. FY15 Highlights 1.13 HUDHUD Impact on Vizag MAIN GATE ROAD FROM HELIPAD -After devastation Status as on today 4
1. FY15 Highlights 1.14 International Steel and Iron ore prices dropped significantly 1.15 Domestic input prices have not fallen in line with international prices 1.16 Significant currency depreciation during the year in major steel producing countries like Russia (48%), Ukraine(88%), Japan(17%) & South Korea (5%). 1.17 Import of Steel products from Japan and South Korea have negligible import duty due to FTA. 5
2. Financial Performance SN Particulars UOM FY15 FY14 Variance 1 Steel Shipment KT 3313 3247 2% 2 Top Line Rs. Crs. 17,162 14,349 20% 3 Expenditure Rs. Crs. 11,773 12,480 6% 4 EBIDTA Rs. Crs. 5,389 1,868 188% 5 Interest Rs. Crs. 3,865 4177 7% 6 Depreciation Rs. Crs. 808 1067 24% 7 PAT Rs. Crs. 648 (1597) 6
3. Comprehensive Action Plan: 3.1 Monetization of identified assets (Rs. 12,050Crore) a) Oxygen Plant Rs. 850 Crore (Completed)Monetization of Oxygen plant b) Odisha Slurry Pipeline - Rs. 4,000 Crore ( Completed)Monetization of Odisha Slurry Pipeline c) Vizag Slurry Pipeline - Rs. 3,600 Crore d) Coke Ovens Rs. 3,600 Crore 3.2 Refinancing of Term Loan (under 5/25scheme) 3. 3 Working Capital (Rs. 3,825Crore) 7
Monetization of Odisha Slurry Pipeline Company has executed Business Transfer Agreement in February 2015 for sale of its 12 MTPA slurry pipeline to Odisha Slurry Pipeline Infrastructure Ltd. (OSPIL) for a consideration of Rs. 4,000 Crore OSPIL is held by group of Investors/ Sponsors comprising India Growth Opportunity Fund, Edelweiss Finance and Investment Private Limited and Essar Steel Limited. Sale consideration based on valuation carried out by Ernst & Young As per Right to Use agreement, OSPIL will transport iron ore from Dabuna to pellet plant of ESIL at Paradeep for annual capacity usage charge of Rs. 720 Crore pa on a take or pay basis for a period of 20 years 8 4. Comprehensive Action Plan:
Monetization of Oxygen plant Company has executed Business Transfer Agreement in 24 th Dec 2013 for sale of its 5100 TPD to INOX Air Product Limited for a consideration of Rs. 850 Crore Sale consideration based on valuation carried out by Ernst & Young As per Right to Use agreement, Inox will Sale all gases in gaseous form to ESIL at Hazira for annual capacity usage charge on a take or pay basis for a period of 15 years. 4. Comprehensive Action Plan: 9
Manufacturing Facilities : Paradeep 10
Manufacturing Facilities :Vizag (Beneficiation) 11
Manufacturing Facilities : Vizag 12
Manufacturing Facilities : Hazira 13
Facilities : Command Center at Hazira 14
Manufacturing Facilities : Plate Mill 15
Manufacturing Facilities : Pipe Mill 16
Manufacturing Facilities : Service Center * Chennai Service Center 17
Manufacturing Facilities : Hypermart 18
Key Messages Operating Margin doubled to 18% in FY15. Major projects completed at competitive cost and all units in full production Equity Infusion of Rs. 1300 crs Slurry pipe line assets. and Rs. 4,850 crs by monetization of ASU and Odisha Monetization of additional assets to further strengthen the Balance Sheet 19