Jindal Steel & Power : FINANCIAL RESULTS FOR FIRST QUARTER FY 2017-18

PRESS R ELEASE

FIN ANCIAL RESUL TS FOR FIRST QUAR T E R FY 2017- 18

JSPL: Quarter of New Beginnings

• India's largest Blast Furnace commissioned at Angul

• Consolidated Revenues up 20% YoY

• Consolidated EBITDA up 33% YoY

• Standalone Cash Profit up 276% YoY

• JPL EBITDA up 157% YoY

JSPL Standalone 1QFY18 Performance (YoY):

• Turnover : Rs. 3,832 Cr; increased by 8%

• EBITDA: Rs. 750 Cr; increased by 14%

• EBITDA Margin: 20%

• Pellet Sales (External + Captive) : 1.64 million tonnes

• Crude Steel Production: 0.90 million tonnes

• Steel Sales: 0.81 million tonnes

  JSPL Consolidated 1QFY18 Performance (YoY):

• Turnover : Rs. 6,127 Cr; increased by 20%

• EBITDA : Rs. 1,353 Cr; increased by 33%

• EBITDA Margin: 22%

• EBITDA - Oman : US$ 32mn

• Crude Steel Production: 1.26 million tonnes

• Steel Sales: 1.15 million tonnes

  JPL 1QFY18 Performance (YoY):

• Turnover : Rs. 1,079 Cr

• EBITDA : Rs. 468 Cr

• EBITDA Margin: 43%

• Cash Profit: Rs. 310 Cr

1. JSPL Standalone Performance
2. First Quarter FY18 Performance

   JSPL Steel production rose 7% in the quarter ended June'2017 to 0.90 million tonnes (0.84 million tonnes in 1QFY17) while Standalone Steel sales during 1QFY18 increased to

   JSPL - Financial Results 1QFY18 1

   0.81million tonnes (up 4% YoY).

   EBITDA for the same period increased by 14% YoY to Rs.750 Cr. EBITDA margin in the reported quarter stood at 20% same as in 4QFY17. The Profit before Tax (PBT) in 1QFY18 improved 39% YoY while Profit before Tax (PAT) improved 36% YoY.

   During the quarter, JSPL secured further coal linkages of 0.511Million MT for its captive power plants, which would lead to further security of coal supply as well as reduction of power costs.

3. Pellet Business Unit

   The Pellet unit of JSPL continued its robust performance both in production and sales of pellets. During 1QFY18, production of pellets increased by 8% YoY and 6% QoQ to reach a level of 1.69 million tonnes. Although JSPL's own consumption of pellets increased by 25% YoY, the company achieved external sales of 0.61 MT during 1QFY18.

4. JSPL Consolidated Performance

   JSPL produced 1.26 million tonnes on the Consolidated level (as compared to 1.19 million tonnes in 1QFY17) and sold 1.15 million tonnes (vs. 1.11 million tonnes in 1QFY17).

   Consolidated EBITDA for the reported quarter, in absolute terms, increased to Rs.1,353 Cr from Rs. 1,015 Cr in the same quarter last year (up 33% YoY). The overall PBT and PAT for 1QFY18 also improved by 63% and 66% YoY respectively.As of quarter ended 30th June'18, JSPL consolidated net debt was maintained at the same level as last quarter.

5. Jindal Power Ltd (JPL)

   The Company with intense focus on "Operational Excellence" posted an all round improvement in its performance during 1QFY18. JPL generated 3,186 units in the reported June quarter as compared to 2,171 units in 1QFY17 (rise of 47%). During 1QFY18, the station PLF increased to

   JSPL - Financial Results 1QFY18 2

   43% compared to 36% in 1QFY17.

   The revenue for 1QFY18 increased by 62% compared to the same quarter in FY17. EBITDA for the quarter ending June'18 recorded an impressive improvement of 157% compared to 1QFY17 and it reached a level of 468Cr (as compared to 182 Cr in 1QFY17). JPL generated cash profits of Rs. 310 Cr in 1QFY18.

   The Company continued with its initiatives on further reduction of operating costs in curtailing the fuel& O&M costs by nearly 20% YoY.Firm steps were taken to prevent coal grade slippages and further reduction of auxiliary power consumption.

6. Global Ventures

7. Oman:During the quarter ended 30th June'2018,Jindal Shadeed produced 0.36 million tonnes of crude steel (as against 0.35 million tonnes in 1QFY17). The rebar mill at Oman achieved its highest productionof 0.22million tonnes this quarter.Overall EBITDA for 1QFY18was maintained at US$32 mn(vs.US$32mn in 4QFY17). Jindal Shadeed now has the largest share of Oman rebar market and is also amongst the top suppliers in other GEC markets.

8. Mozambique:Operations in Mozambique produced 0.4 million tonnes of ROM during quarter and is now all set to double its production during the next six months. The Company is planning to augment the capacity of the existing coal washery and increase the number of shifts to enhance production of coking coal from the Chirodzi mines.
9. Australia: During 1QFY18, the operation in Wongawilli mines had to be discontinued due to its mining contractor's insolvency. The operations are all set for resumption from the middle of August'2017.

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10. Overview and Outlook
11. Steel - Market Outlook

    CY 17 started off well for the global steel industry with steel demand during the first half of the year increasing by 4.5% in the current year compared to 0.8% in CY 16. Major countries including US, Europe, China and Japan- all witnessed good growth of their production and consumption during first half of CY17. China continues to shut a part of their capacity- largely old and polluting units. For India, the imports have continued to decline by 7% during the first 3 months of FY18 while the exports during the same period have increased by 66%, making India the net exporter of steel. The overall production and consumption during 1QFY18 have risen by 3.5% and 4.6% respectively. The overall outlook remains promising with demand of HR coils, plates and structures posting higher growth rates while the demand for TMT rebar and Wire rod still remain tepid. With the increasing activity level of irrigation and water distribution sectors, infrastructure including ports, air ports, bridges and roads/flyovers, the steel demand is expected to grow

    @ 5-6% during FY18. Housing and commercial sectors, which slowed down following demonetization and implementation of the new Goods & Services Tax (GST)regime,are expected to pick up during Q3 and Q4 of FY18.

    The market for coking coal and pellets also appear promising, with upticks in demand seen during July and August. The production of iron ore has increased substantially during Q1, FY18 leading to softening of iron ore and fines prices, which would have positive impact for the steel and pellet producers.

12. JSPL Outlook
13. Steel

JSPL have commissioned their 4 MT Blast Furnace into services during Q2, FY 18. Its production will gradually ramp up and is expected to reach its full potential by the end of the current financial year. Consequently, the volume of steel produced and delivered

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