Coal news and updates

Higher provision on Australian project cuts JSPL’s Q1 net

August 7: A sharp increase in depreciation, financing cost and restructuring cost of coking coal mines in Australia that it had acquired from Gujarat NRE Coke in April this year adversely impacted Jindal Steel & Power Limited’s April-June quarter consolidated net profit which declined by about 20%, the company said in a statement.

Jindal Steel & Power Limited (JSPL) had taken control of Wollonggong Coal Ltd (WCL) in Australia from Gujarat NRE Coke.

The increase in depreciation and financing cost was due to commissioning of new power units and pellet plants, industry sources said.

JSPL’s consolidated net profit during the quarter fell to Rs 402 crore from Rs 501 crore during the corresponding quarter of the previous financial year, the statement said.

On a standalone basis, however, the company recorded a 28% increase in its net profit to Rs 306 crore during Q1 of 2014-15 against a standalone net profit of Rs 239 crore in the same period last year.
 
On a quarter–on- quarter basis, the company’s net profit in Q1 of 2014-15 increased by 6% from a net profit of Rs 378 crore recorded in the last quarter (Q4) of 2013-14.

During the quarter under review, the company recorded a 10% increase in its turnover to Rs 4,978 crore as compared to Rs 4,540 crore in the same quarter of 2013-14.

Power:

During the first quarter of 2014-15, the company’s power production increased by 29.2% to 1,682 million kWh against 1,301 million kWh produced in Q1 of 2013-14.

The generation would have been much higher as the company completed three out of four 600 MW power units of Tamnar Phase II under Jindal Power Limited. However, because of inadequate supply of coal, only one unit could be operated.

“With improved availability of coal and transmission capacity, we are hopeful of operating other units,” the statement said.

Another captive power plant of the company at Dongamuha, with a capacity of 4x315 MW, achieved substantial improvement in its availability and PLF, as a result of which it posted increase in profitability.

“Although, all the 6x135 MW units of the Angul power plant have been commissioned, the utilisation remained low due to restrictions on export of power,” the statement added.

Steel:

Production of steel products (slab/round/bloom/beam) during the quarter increased by 13% to 800,522 tons from 707,144 tons produced in the corresponding period of previous financial year.

The production of pig iron and hot metal during the quarter, however, declined 6% to 397,797 tons from 423,780 tons in the first quarter of 2013-14, the release said.

JSPL’s new pellet plant, with a capacity of 4.5 million tons per annum (mtpa), went into operation during the first quarter of 2014-15. However, production had to be curtailed due to restricted availability of iron ore fines.

The company had also upgraded two each of its blast furnaces (BF) and electric arc furnaces (EAF) during the quarter.

“With these, the modernisation of iron and steel shops at Raigarh was completed and the plant’s capacity has been enhanced to 3.5 mtpa as against the earlier 3 mtpa,” the statement said.