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Key takeaways
Company articulated three growth drivers for FY2012 - (1) expects sale of 2 mn pellets in
FY2012 vs 500-600K in FY2011. At current pellet prices the company expects to generate
US$275 mn of EBITDA in FY2012, (2) commissioning of captive power plants – at least 4
X 135 MW units would be available in FY2012E, (3) increase in finished steel sales likely at
2.5 mn tons vs 1.8 mn in FY2011.
Company has started mining and extracted ~400K tons of iron ore (iron ore grade is
~55% Fe) from Bolivian mines. Company expects shipments of 2 mn tones of iron ore in
FY2012E which will increase to 3 mn tones in FY2013E. Company has invested in
requisite logistics to carry the ore up to the Argentinean port. Company expects
extraction cost of US$15 and transportation cost of US$25 taking the total FOB cost
US$40.
JSPL expects average merchant tariff Rs3.5- 4 / KWH in FY2012 versus Rs4+ in FY2011.
Company indicated that it can get into a one-year contract at a rate of Rs3.8/KWh.
The company has outlined aggressive capex plans for the next three years for JSPL
standalone business. Company expects to spend Rs50 bn in FY2011E, Rs70 in FY2012E
and Rs75 bn in FY2013E. For the power business, company has outlined capex of Rs40
bn in FY2012E and Rs50 bn in FY2013E.
Shadeed HBI plant is running at 80% capacity. Total cost of production at the current iron
prices is US$370 per ton comprising of pellet cost of US$300/ ton (1.5 tons of pellets are
required per ton of HBR, cost of pellets is US$200/ ton), gas cost at US$10/ ton, other
variable costs of US$20/ton and other fixed cost at US$40/ton
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Key takeaways
Company articulated three growth drivers for FY2012 - (1) expects sale of 2 mn pellets in
FY2012 vs 500-600K in FY2011. At current pellet prices the company expects to generate
US$275 mn of EBITDA in FY2012, (2) commissioning of captive power plants – at least 4
X 135 MW units would be available in FY2012E, (3) increase in finished steel sales likely at
2.5 mn tons vs 1.8 mn in FY2011.
Company has started mining and extracted ~400K tons of iron ore (iron ore grade is
~55% Fe) from Bolivian mines. Company expects shipments of 2 mn tones of iron ore in
FY2012E which will increase to 3 mn tones in FY2013E. Company has invested in
requisite logistics to carry the ore up to the Argentinean port. Company expects
extraction cost of US$15 and transportation cost of US$25 taking the total FOB cost
US$40.
JSPL expects average merchant tariff Rs3.5- 4 / KWH in FY2012 versus Rs4+ in FY2011.
Company indicated that it can get into a one-year contract at a rate of Rs3.8/KWh.
The company has outlined aggressive capex plans for the next three years for JSPL
standalone business. Company expects to spend Rs50 bn in FY2011E, Rs70 in FY2012E
and Rs75 bn in FY2013E. For the power business, company has outlined capex of Rs40
bn in FY2012E and Rs50 bn in FY2013E.
Shadeed HBI plant is running at 80% capacity. Total cost of production at the current iron
prices is US$370 per ton comprising of pellet cost of US$300/ ton (1.5 tons of pellets are
required per ton of HBR, cost of pellets is US$200/ ton), gas cost at US$10/ ton, other
variable costs of US$20/ton and other fixed cost at US$40/ton
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