Tue Jan 31, 2012
Jan 31 - Fitch Ratings has affirmed India-based Goyal Energy & Steel Pvt. Ltd.'s (GESPL) National Long-Term rating at 'Fitch B+(ind)'. The Outlook is Stable. A list of additional ratings is provided at the end of this commentary.
The affirmation reflects improvements in GESPL's net financial leverage (net adjusted debt/EBITDA) to 6.2x in the financial year ended March 2011 (FY11) from 9.6x in FY10, as its EBITDA margins increased to 4.7% from 2.5%. This is mainly due to higher average sales realisation per tonne of angles and channels at the company's rolling mill compared with previous year's and also because of partial backward integration through an ingots manufacturing facility.
The ratings, however, remain constrained by the company's tight liquidity position, as reflected through its continuous 100% utilisation and occasional over-utilisation of the fund-based limits by 0.5%-1%. The ratings are further constrained by the price volatility risk because GESPL buys its raw materials from the open market.
Positive rating guidelines include an improvement in GESPL's liquidity position in the next two quarters along with the maintenance of the current financial profile. Negative rating guidelines include any significant debt-funded capex leading to a decline in EBITDA margins and hence deterioration in net leverage to 10x.
In FY11, GESPL reported revenue of INR1,222.9m (FY10: INR1,160.4m). Its total adjusted debt increased to INR367.9m in FY11 (FY10: INR305.0m), while free cash flow (FCF), though improved, remained negative at INR126.5m (FY10: negative INR135.6m). Fitch expects FCF to remain negative in FY12 mainly due to the company's higher working capital requirements because of increased volume of business.
Fitch has also affirmed GESPL's bank facilities as follows:
- INR32.8m term loans: affirmed at 'Fitch B+(ind)'
- INR395m fund-based limits (increased from INR245m): affirmed at 'Fitch B+(ind)'
(sourced Reuters)
Showing posts with label EBITDA. Show all posts
Showing posts with label EBITDA. Show all posts
Tuesday, January 31, 2012
Friday, December 16, 2011
JK Paper may buy coal from open market -Mr Kumarswamy CFO
Friday, 16 Dec 2011
Mr V Kumarswamy CFO of JK Paper spoke to CNBC-TV18 about his outlook for the business and the way ahead for his company. He says that after the terrible past quarter, this quarter seems to be much better. Mr Kumaraswamy said that that JK Paper will go ahead and buy coal from the European markets if need be since the plants cannot be kept shut.
Q - Your profitability declined by about 78% last quarter and margins fell from 28% to 17%. Has Q3 been better for you all?
A - Well, the last quarter’s disturbance was created largely by coal supply disturbances which you are reading in the paper almost daily now, and also some kind of dumping of coated paper from China consequent to US and EU putting some very high dumping duties there. A lot of quantities were thus diverted here.
The coated paper scenario has been largely taken care of by the currency depreciation in India, almost going from INR 45 to INR 53 per dollar levels that has made imports of coated paper that much costlier. Coal supplies are improving but no where near normal. So that’s how the current quarter is panning out to be.
Q - This gap that you have between what was your supply of about 1.5 tonne of coal required for every tonne of paper and what you get now, are you looking at buying in the open market? How are you looking at resolving this issue?
A - We have to buy it from the European markets, there is no other alternative. I can't keep the plant shut for this reason. After all, there is a positive contribution and EBITDA margins even at the bought-out coal. We always buy coal from European markets because there is no way that we will not buy from the open market.
(sourced:CNBC-TV18)
Mr V Kumarswamy CFO of JK Paper spoke to CNBC-TV18 about his outlook for the business and the way ahead for his company. He says that after the terrible past quarter, this quarter seems to be much better. Mr Kumaraswamy said that that JK Paper will go ahead and buy coal from the European markets if need be since the plants cannot be kept shut.
Q - Your profitability declined by about 78% last quarter and margins fell from 28% to 17%. Has Q3 been better for you all?
A - Well, the last quarter’s disturbance was created largely by coal supply disturbances which you are reading in the paper almost daily now, and also some kind of dumping of coated paper from China consequent to US and EU putting some very high dumping duties there. A lot of quantities were thus diverted here.
The coated paper scenario has been largely taken care of by the currency depreciation in India, almost going from INR 45 to INR 53 per dollar levels that has made imports of coated paper that much costlier. Coal supplies are improving but no where near normal. So that’s how the current quarter is panning out to be.
Q - This gap that you have between what was your supply of about 1.5 tonne of coal required for every tonne of paper and what you get now, are you looking at buying in the open market? How are you looking at resolving this issue?
A - We have to buy it from the European markets, there is no other alternative. I can't keep the plant shut for this reason. After all, there is a positive contribution and EBITDA margins even at the bought-out coal. We always buy coal from European markets because there is no way that we will not buy from the open market.
(sourced:CNBC-TV18)
Tuesday, November 22, 2011
Sadovaya increases coal sales 20pct YoY in 10 months 2011
Tuesday, 22 Nov 2011
Sadovaya Group reported on November 15 a 23% MoM increase in monthly coal sales in October to 136200 tonnes. The company increased underground mining in October by 7% MoM to 45700 tonnes, coal production from waste recovery remained almost unchanged at 5800 tonnes. With such monthly performance, Sadovaya increased January to September 2011 coal sales by 20% YoY to 1 million tonnes including 370,000 tonnes of underground mining which advanced by 61% YoY.
According to Phoenix Capital “The news is marginally positive for SGR. Even though the of volume coal sales in October suggests a 3% Y-o-Y decline, the company operating performance is clearly on track for growth on YoY basis. A new long wall at Sadovaya Mine subsidiary, nearing full capacity in October 2011 is making its contribution to this augment in mining. The growth in coal production by the year end may be fueled by the announced and expected launch of two long walls at Rassvet-1 Mine, once this event materializes. Nevertheless, SGR currently appears to fall short of reaching its 2011 target volumes of 501,000 tonnes of coal production from underground mining and 141,000 tonnes from waste recovery though 1.2 million tonnes of coal sales seems achievable through more selling of purchased and reprocessed coal. The latter suppositions cut to our projections for 2011 EBITDA at USD 25 million which yielded a 39% premium over peers on the forward 2011F EV/EBITDA multiple as of November 15.”
(sourced Phoenix-capital.ua)
Sadovaya Group reported on November 15 a 23% MoM increase in monthly coal sales in October to 136200 tonnes. The company increased underground mining in October by 7% MoM to 45700 tonnes, coal production from waste recovery remained almost unchanged at 5800 tonnes. With such monthly performance, Sadovaya increased January to September 2011 coal sales by 20% YoY to 1 million tonnes including 370,000 tonnes of underground mining which advanced by 61% YoY.
According to Phoenix Capital “The news is marginally positive for SGR. Even though the of volume coal sales in October suggests a 3% Y-o-Y decline, the company operating performance is clearly on track for growth on YoY basis. A new long wall at Sadovaya Mine subsidiary, nearing full capacity in October 2011 is making its contribution to this augment in mining. The growth in coal production by the year end may be fueled by the announced and expected launch of two long walls at Rassvet-1 Mine, once this event materializes. Nevertheless, SGR currently appears to fall short of reaching its 2011 target volumes of 501,000 tonnes of coal production from underground mining and 141,000 tonnes from waste recovery though 1.2 million tonnes of coal sales seems achievable through more selling of purchased and reprocessed coal. The latter suppositions cut to our projections for 2011 EBITDA at USD 25 million which yielded a 39% premium over peers on the forward 2011F EV/EBITDA multiple as of November 15.”
(sourced Phoenix-capital.ua)
Saturday, October 29, 2011
ArcelorMittal Announces the Publication of Q311 EBITDA Sell-Side Analyst Consensus Figures on
Press release
Oct.29, 2011
LUXEMBOURG: ArcelorMittal today announces the publication of sell-side analysts' consensus forecasts for ArcelorMittal's Q3'11 EBITDA. The consensus figures are based on sell-side analyst estimates recorded on an external web based tool provided and managed by an independent company called Vuma Financial Services Limited (trade name:Vuma Consensus). The consensus figures together with the full list of sell-side analysts who submitted their forecasts are available on our website.
View consensus figures
ArcelorMittal does not express any opinion as to the accuracy or relevance of this consensus or any component thereof. Any use of or reliance on this data is purely at the risk of the user.
About ArcelorMittal:
ArcelorMittal is the world's leading integrated steel and mining company, with a presence in more than 60 countries.
ArcelorMittal is the leader in all major global carbon steel markets, including automotive, construction, household appliances and packaging, with leading R&D and technology. The Group also has a world class mining business with a global portfolio of over 20 mines in operation and development, and is the world's 4th largest iron ore producer. With operations in over 22 countries spanning four continents, the Company covers all of the key industrial markets, from emerging to mature, and has outstanding distribution networks.
Through its core values of sustainability, quality and leadership, ArcelorMittal commits to operating in a responsible way with respect to the health, safety and well-being of its employees, contractors and the communities in which it operates. It is also committed to the sustainable management of the environment. It takes a leading role in the industry's efforts to develop breakthrough steelmaking technologies and is actively researching and developing steel-based technologies and solutions that contribute to combat climate change. ArcelorMittal is a member of the FTSE4Good Index and the Dow Jones Sustainability World Index.
In 2010, ArcelorMittal had revenues of $78.0 billion and crude steel production of 90.6 million tonnes, representing approximately 6 per cent of world steel output. The Group's mining operations produced 47 million tonnes of iron ore and 7 million tonnes of metallurgical coal.
ArcelorMittal is listed on the stock exchanges of New York (MT), Amsterdam (MT), Paris (MT), Brussels (MT), Luxembourg (MT) and on the Spanish stock exchanges of Barcelona, Bilbao, Madrid and Valencia (MTS).
For more information about ArcelorMittal visit: www.arcelormittal.com .
source: ArcelorMittal
Oct.29, 2011
LUXEMBOURG: ArcelorMittal today announces the publication of sell-side analysts' consensus forecasts for ArcelorMittal's Q3'11 EBITDA. The consensus figures are based on sell-side analyst estimates recorded on an external web based tool provided and managed by an independent company called Vuma Financial Services Limited (trade name:Vuma Consensus). The consensus figures together with the full list of sell-side analysts who submitted their forecasts are available on our website.
View consensus figures
ArcelorMittal does not express any opinion as to the accuracy or relevance of this consensus or any component thereof. Any use of or reliance on this data is purely at the risk of the user.
About ArcelorMittal:
ArcelorMittal is the world's leading integrated steel and mining company, with a presence in more than 60 countries.
ArcelorMittal is the leader in all major global carbon steel markets, including automotive, construction, household appliances and packaging, with leading R&D and technology. The Group also has a world class mining business with a global portfolio of over 20 mines in operation and development, and is the world's 4th largest iron ore producer. With operations in over 22 countries spanning four continents, the Company covers all of the key industrial markets, from emerging to mature, and has outstanding distribution networks.
Through its core values of sustainability, quality and leadership, ArcelorMittal commits to operating in a responsible way with respect to the health, safety and well-being of its employees, contractors and the communities in which it operates. It is also committed to the sustainable management of the environment. It takes a leading role in the industry's efforts to develop breakthrough steelmaking technologies and is actively researching and developing steel-based technologies and solutions that contribute to combat climate change. ArcelorMittal is a member of the FTSE4Good Index and the Dow Jones Sustainability World Index.
In 2010, ArcelorMittal had revenues of $78.0 billion and crude steel production of 90.6 million tonnes, representing approximately 6 per cent of world steel output. The Group's mining operations produced 47 million tonnes of iron ore and 7 million tonnes of metallurgical coal.
ArcelorMittal is listed on the stock exchanges of New York (MT), Amsterdam (MT), Paris (MT), Brussels (MT), Luxembourg (MT) and on the Spanish stock exchanges of Barcelona, Bilbao, Madrid and Valencia (MTS).
For more information about ArcelorMittal visit: www.arcelormittal.com .
source: ArcelorMittal
Saturday, October 22, 2011
Iron ore shortages lead to 71.4% decline in JSW Steel profits
Sat,Oct22, 2011
Mumbai: Indian steel company, JSW Steel announced its Q2 results today, showcasing decline in net profit by 71.4 per cent at Rs. 127.12 crore as compared to Rs. 445.44 crore in Q2 FY10-11, much more than street expectations. The stock market did not react kindly to the results as the company’s share prices declined to Rs. 569.29 before ending at Rs. 580.45, down by 0.37 per cent.
Net sales rose to Rs. 7,625.06 crore from Rs. 5,712.84 in the corresponding quarter of FY11, reflecting a growth of 33.4 per cent on year on year basis (YoY) and a quarter on quarter (QoQ) growth of 8 per cent. Turnover stood at Rs. 8,242.55 crore.
Iron ore shortage has led to lower EBIDTA margin of 17.4 per cent while EBIDTA for the quarter was Rs. 1,332.95 crore, up by 15% over the corresponding quarter of the previous year.
During the current quarter, the Company achieved production of Crude Steel of 1.738 million tonnes, up 11 per cent and saleable steel of 1.882 million tonnes, up 19 per cent. Production was expected to be scaled down to only 30 per cent of capacity. However, the company reported that it lost 4.5 lakh tonnes of output last quarter on iron ore shortage. It also had to purchase 1.9 million tonnes of iron ore in the Karnataka auction.
While, the increasingly high cost of production by Rs. 1,500 per tonne, put pressure on this quarter results, it expects coking coal and iron ore scrap price to moderate, the company said. It also reported a forex loss of Rs. 512.98 crore due to adverse movement in rupee dollar parity.
The steel giant has cut its forecasts for FY12 volume of production guidance and sales guidance by 14 per cent and 13 per cent respectively.
sourced profit.ndtv
Mumbai: Indian steel company, JSW Steel announced its Q2 results today, showcasing decline in net profit by 71.4 per cent at Rs. 127.12 crore as compared to Rs. 445.44 crore in Q2 FY10-11, much more than street expectations. The stock market did not react kindly to the results as the company’s share prices declined to Rs. 569.29 before ending at Rs. 580.45, down by 0.37 per cent.
Net sales rose to Rs. 7,625.06 crore from Rs. 5,712.84 in the corresponding quarter of FY11, reflecting a growth of 33.4 per cent on year on year basis (YoY) and a quarter on quarter (QoQ) growth of 8 per cent. Turnover stood at Rs. 8,242.55 crore.
Iron ore shortage has led to lower EBIDTA margin of 17.4 per cent while EBIDTA for the quarter was Rs. 1,332.95 crore, up by 15% over the corresponding quarter of the previous year.
During the current quarter, the Company achieved production of Crude Steel of 1.738 million tonnes, up 11 per cent and saleable steel of 1.882 million tonnes, up 19 per cent. Production was expected to be scaled down to only 30 per cent of capacity. However, the company reported that it lost 4.5 lakh tonnes of output last quarter on iron ore shortage. It also had to purchase 1.9 million tonnes of iron ore in the Karnataka auction.
While, the increasingly high cost of production by Rs. 1,500 per tonne, put pressure on this quarter results, it expects coking coal and iron ore scrap price to moderate, the company said. It also reported a forex loss of Rs. 512.98 crore due to adverse movement in rupee dollar parity.
The steel giant has cut its forecasts for FY12 volume of production guidance and sales guidance by 14 per cent and 13 per cent respectively.
sourced profit.ndtv
Wednesday, October 12, 2011
Russia Evraz revives dividends, shares soar
Wed Oct 12, 2011
* H1 net $263 mln, Reuters poll forecast $614 mln
* H1 EBITDA $1.62 bln, poll forecast $1.65 bln
* Shares up more than 10 percent in London
* Will pay interim, special dividend
Oct 12 (Reuters) - Russian steelmaker Evraz on Wednesday announced its first interim dividends since the global financial crisis hit in 2008, sending its shares sharply higher despite missing estimates with its first half results.
"As a result of the 1H 2011 performance and the strength of our balance sheet the directors have decided to resume the payment of dividends to shareholders," chief financial officer Giacomo Baizini said in a statement.
"We are declaring an interim dividend of US$89 million or 34 percent of our net income in 1H 2011. We are also declaring the payment of a special dividend of $402 million."
The payout is equivalent to $0.60 a share, and the special dividend equals $2.70 a share.
At 1656 GMT, the shares were up 10.4 percent or $1.63 at $17.25.
Evraz, part-owned by billionaire Roman Abramovich, has improved its liquidity position this year by reducing total debt to $6.04 billion at the end of the first half, compared to $7.81 billion at the end of 2010.
Fitch Ratings last month upgraded Evraz's debt rating to 'BB-' from 'B+' on the back of the company's successful refinancing and debt reduction efforts.
"All in all, the much improved balance sheet with no significant short-term maturities makes the results decent and the company less vulnerable in case of weak market conditions," VTB analysts wrote in a note.
Although the shares surged, the company's first-half net profit and earnings before depreciation, taxation and amortisation (EBITDA) came in below market expectations.
First half net profit was $263 million, while analysts polled by Reuters expected $614 million, up from a year-earlier loss of $270 million.
Evraz also said one-off losses related to the conversion of debts had reduced the figure from $494 million.
First half EBITDA was $1.63 billion, up from $1.15 billion in the year-earlier period and just below the $1.65 billion poll forecast.
Sales were $8.4 billion, up from $6.38 billion and more than the $8.14 billion poll forecast.
CHALLENGING MARKET
Evraz also warned that it has experienced weaker trading in recent weeks due to lower production and export prices in part caused by the challenging global economic environment.
"The group's recent trading has been impacted by scheduled repairs, lower production volumes, a weak market environment in the Czech Republic and a change in product mix in South Africa," Chief Executive Alexander Frolov said in a statement.
"In addition, in recent weeks, there have been some decreases in export prices," he added.
In China, the world's leading steel producer, Shanghai rebar prices dropped 11 percent in September.
The company, which does not ship significant volumes there, earned 34 percent of its revenues in Russia last year and 24 percent in the Americas, with another 10 percent of sales to the European market.
In a separate interview with Reuters Insider, Baizini said the company is prepared for any market slowdown.
"We make sure that we are not producing any steel which is unsold," he said.
"We do keep monitoring the situation, early days, but we're ready for it."
(sourced Reuters)
* H1 net $263 mln, Reuters poll forecast $614 mln
* H1 EBITDA $1.62 bln, poll forecast $1.65 bln
* Shares up more than 10 percent in London
* Will pay interim, special dividend
Oct 12 (Reuters) - Russian steelmaker Evraz on Wednesday announced its first interim dividends since the global financial crisis hit in 2008, sending its shares sharply higher despite missing estimates with its first half results.
"As a result of the 1H 2011 performance and the strength of our balance sheet the directors have decided to resume the payment of dividends to shareholders," chief financial officer Giacomo Baizini said in a statement.
"We are declaring an interim dividend of US$89 million or 34 percent of our net income in 1H 2011. We are also declaring the payment of a special dividend of $402 million."
The payout is equivalent to $0.60 a share, and the special dividend equals $2.70 a share.
At 1656 GMT, the shares were up 10.4 percent or $1.63 at $17.25.
Evraz, part-owned by billionaire Roman Abramovich, has improved its liquidity position this year by reducing total debt to $6.04 billion at the end of the first half, compared to $7.81 billion at the end of 2010.
Fitch Ratings last month upgraded Evraz's debt rating to 'BB-' from 'B+' on the back of the company's successful refinancing and debt reduction efforts.
"All in all, the much improved balance sheet with no significant short-term maturities makes the results decent and the company less vulnerable in case of weak market conditions," VTB analysts wrote in a note.
Although the shares surged, the company's first-half net profit and earnings before depreciation, taxation and amortisation (EBITDA) came in below market expectations.
First half net profit was $263 million, while analysts polled by Reuters expected $614 million, up from a year-earlier loss of $270 million.
Evraz also said one-off losses related to the conversion of debts had reduced the figure from $494 million.
First half EBITDA was $1.63 billion, up from $1.15 billion in the year-earlier period and just below the $1.65 billion poll forecast.
Sales were $8.4 billion, up from $6.38 billion and more than the $8.14 billion poll forecast.
CHALLENGING MARKET
Evraz also warned that it has experienced weaker trading in recent weeks due to lower production and export prices in part caused by the challenging global economic environment.
"The group's recent trading has been impacted by scheduled repairs, lower production volumes, a weak market environment in the Czech Republic and a change in product mix in South Africa," Chief Executive Alexander Frolov said in a statement.
"In addition, in recent weeks, there have been some decreases in export prices," he added.
In China, the world's leading steel producer, Shanghai rebar prices dropped 11 percent in September.
The company, which does not ship significant volumes there, earned 34 percent of its revenues in Russia last year and 24 percent in the Americas, with another 10 percent of sales to the European market.
In a separate interview with Reuters Insider, Baizini said the company is prepared for any market slowdown.
"We make sure that we are not producing any steel which is unsold," he said.
"We do keep monitoring the situation, early days, but we're ready for it."
(sourced Reuters)
Tuesday, August 23, 2011
Essar Energy hit by project delays
Aug22,2011
* Still awaiting forest clearance for some coal blocks
* Says minor delays to three power projects
* Analysts say company faces a trust deficit after project hold-ups
* H1 EBITDA $477.9 million vs $467 mln consensus
* Shares fall 4.4 pct
* Still awaiting forest clearance for some coal blocks
* Says minor delays to three power projects
* Analysts say company faces a trust deficit after project hold-ups
* H1 EBITDA $477.9 million vs $467 mln consensus
* Shares fall 4.4 pct
LONDON (Reuters) - India-focused refiner and power generator Essar Energy said three projects would be delayed as it continues to battle hold-ups from regulators, hurting its shares.
The company said on Monday there would be "minor delays" to its Salaya I, Mahan I and Vladinar phase 2 power projects and that it is still awaiting forest clearance from the Indian government for its Mahan, Chakla and Ashok Karkata coal blocks which will provide fuel for the Mahan I and Tori power stations.
Shares in Essar traded down 4.4 percent to 246.3 pence, paring earlier losses of as much as 6 percent, and making the company the biggest loser on Britain's bluechip index .
"We believe that Essar Energy now faces a trust deficit and therefore there will be an even greater investor focus on project delivery times," said analysts at JP Morgan in a note.
Essar Energy said in its statement: "Delays to regulatory approvals and delays to the access of fuel supplies are a cause for concern."
"Not only do these delays impact the economic returns on projects, but they are acting to discourage investment in the sector from project sponsors, debt providers and equity investors."
For the six months ended June 30, the company posted earnings before interest, tax, depreciation and amortisation (EBITDA) of $477.9 million, up from $320.2 million last year, boosted by higher refinery margins.
This compared with a company-supplied anlayst consensus figure of $467 million.
JP Morgan said in a note that when measured on a current price basis, earnings missed consensus, having been negatively impacted by a foreign exchange loss in the company's oil and gas unit.
The FTSE 100 company was positive on the future of its refining business, saying it expected margins to stay at their current high levels to the end of 2011.
"Strong global demand, the earthquake in Japan and events in the Middle East and north Africa pushed up refining margins in the first half of 2011," the company said.
The company, which agreed to buy Royal Dutch Shell's (RDSa.L) Stanlow refinery in northwest England for $350 million in February, said its focus was on its Indian power projects and integrating Stanlow into its business.
"We do not have any plans for any further acquisitions of refineries in Europe or elsewhere," chief executive Naresh Nayyar said in a conference call with reporters.
Essar Energy, the majority shareholder in India-listed Essar Oil , is itself 77 percent-owned by privately-held Indian conglomerate Essar Group.
The company said on Monday there would be "minor delays" to its Salaya I, Mahan I and Vladinar phase 2 power projects and that it is still awaiting forest clearance from the Indian government for its Mahan, Chakla and Ashok Karkata coal blocks which will provide fuel for the Mahan I and Tori power stations.
Shares in Essar traded down 4.4 percent to 246.3 pence, paring earlier losses of as much as 6 percent, and making the company the biggest loser on Britain's bluechip index .
"We believe that Essar Energy now faces a trust deficit and therefore there will be an even greater investor focus on project delivery times," said analysts at JP Morgan in a note.
Essar Energy said in its statement: "Delays to regulatory approvals and delays to the access of fuel supplies are a cause for concern."
"Not only do these delays impact the economic returns on projects, but they are acting to discourage investment in the sector from project sponsors, debt providers and equity investors."
For the six months ended June 30, the company posted earnings before interest, tax, depreciation and amortisation (EBITDA) of $477.9 million, up from $320.2 million last year, boosted by higher refinery margins.
This compared with a company-supplied anlayst consensus figure of $467 million.
JP Morgan said in a note that when measured on a current price basis, earnings missed consensus, having been negatively impacted by a foreign exchange loss in the company's oil and gas unit.
The FTSE 100 company was positive on the future of its refining business, saying it expected margins to stay at their current high levels to the end of 2011.
"Strong global demand, the earthquake in Japan and events in the Middle East and north Africa pushed up refining margins in the first half of 2011," the company said.
The company, which agreed to buy Royal Dutch Shell's (RDSa.L) Stanlow refinery in northwest England for $350 million in February, said its focus was on its Indian power projects and integrating Stanlow into its business.
"We do not have any plans for any further acquisitions of refineries in Europe or elsewhere," chief executive Naresh Nayyar said in a conference call with reporters.
Essar Energy, the majority shareholder in India-listed Essar Oil , is itself 77 percent-owned by privately-held Indian conglomerate Essar Group.
Wednesday, July 20, 2011
Peabody upbeat on Macarthur Coal bid
By Sarah-Jane Tasker, The Australian
US coal giant Peabody Energy is confident of securing control of Macarthur Coal and further expanding its Australian operations, which have significantly boosted its quarterly earnings on the back of higher prices.
Chairman and chief executive, Greg Boyce, discussing the company's second-quarter results yesterday, said partnering with Macarthur's 16-per cent shareholder, ArcelorMittal, in the $4.7 billion bid for Macarthur, increased the chances of the offer succeeding.
"It bolsters our chances very significantly of being very successful on this bid," Mr Boyce told Wall Street analysts.
"We only need to get 50 per cent of the shareholders to take control of Macarthur and we start with 16 per cent, meaning we really have to get another 34 per cent, which is about 60 per cent of the free float that is available. So it is a strong partnership for us."
Peabody president Richard Navarre said the company hoped to complete due diligence on the Queensland coal target in the next week and a half.
"We started site visits this week. We have moved on from there," he said.
Peabody's move on Macarthur came the day after Julia Gillard announced the details of the controversial carbon tax, adding weight to the government's argument the proposal would not dent investment in the coal sector.
Mr Boyce said the energy giant's offer for Macarthur had already factored in the carbon tax and the minerals resources rent tax (MRRT).
"We have incorporated forward views of carbon pricing, as well as the MRRT, in terms of where we're at with Macarthur. So our due diligence that we're doing now is on the operating and business context, not the impacts of those (taxes)," Mr Boyce said.
However, he went on to say that he remained " very strongly opposed to the carbon tax".
"We don't think it's the right policy framework to move forward with. But in terms of specific numbers, it's too early to really come out with any modelled impacts on a specific basis."
Peabody announced strong quarterly results. Second-quarter earnings before interest, tax, depreciation and amortisation were up 32 per cent from the previous year to $US579.5 million ($539.5m), while revenue jumped 21 per cent to $US2 billion.
Executive vice-president Mike Crews said Australia had led the way with a 69 per cent increase in EBITDA. The company also said its Australian operations contributed more than 60 per cent of Peabody's mining EBITDA in the second quarter.
Mr Navarre said historic prices for coal were being supported by supply constraints, some of which had been caused by the severe flooding in Queensland's coal regions earlier this year.
US coal giant Peabody Energy is confident of securing control of Macarthur Coal and further expanding its Australian operations, which have significantly boosted its quarterly earnings on the back of higher prices.
Chairman and chief executive, Greg Boyce, discussing the company's second-quarter results yesterday, said partnering with Macarthur's 16-per cent shareholder, ArcelorMittal, in the $4.7 billion bid for Macarthur, increased the chances of the offer succeeding.
"It bolsters our chances very significantly of being very successful on this bid," Mr Boyce told Wall Street analysts.
"We only need to get 50 per cent of the shareholders to take control of Macarthur and we start with 16 per cent, meaning we really have to get another 34 per cent, which is about 60 per cent of the free float that is available. So it is a strong partnership for us."
Peabody president Richard Navarre said the company hoped to complete due diligence on the Queensland coal target in the next week and a half.
"We started site visits this week. We have moved on from there," he said.
Peabody's move on Macarthur came the day after Julia Gillard announced the details of the controversial carbon tax, adding weight to the government's argument the proposal would not dent investment in the coal sector.
Mr Boyce said the energy giant's offer for Macarthur had already factored in the carbon tax and the minerals resources rent tax (MRRT).
"We have incorporated forward views of carbon pricing, as well as the MRRT, in terms of where we're at with Macarthur. So our due diligence that we're doing now is on the operating and business context, not the impacts of those (taxes)," Mr Boyce said.
However, he went on to say that he remained " very strongly opposed to the carbon tax".
"We don't think it's the right policy framework to move forward with. But in terms of specific numbers, it's too early to really come out with any modelled impacts on a specific basis."
Peabody announced strong quarterly results. Second-quarter earnings before interest, tax, depreciation and amortisation were up 32 per cent from the previous year to $US579.5 million ($539.5m), while revenue jumped 21 per cent to $US2 billion.
Executive vice-president Mike Crews said Australia had led the way with a 69 per cent increase in EBITDA. The company also said its Australian operations contributed more than 60 per cent of Peabody's mining EBITDA in the second quarter.
Mr Navarre said historic prices for coal were being supported by supply constraints, some of which had been caused by the severe flooding in Queensland's coal regions earlier this year.
Monday, February 14, 2011
FITCH affirms Baosteel at A-, outlook stable
Mon Feb 14, 2011 6:13am GMT
(The following was released by the rating agency)
(The following was released by the rating agency)
February 14 (Fitch) Fitch Ratings has affirmed China-based Baoshan Iron & Steel Company Limited's (Baosteel) Long-term foreign currency Issuer Default Rating (IDR) at 'A-' and Short-term foreign currency IDR at 'F2'. The Outlook is Stable
Using Fitch's Parent and Subsidiary rating Linkage methodology, the 'A-' IDR incorporates a one-notch uplift to Baosteel's standalone rating, reflecting the strong linkages between its state-owned parent Baosteel Group Corporation (BGC) and the Chinese government. This is based on BGC's and Baosteel's strategic importance to the country and potential support from the Chinese government should it be required. BGC, being the largest steel company held by the state-owned Assets Supervision and Administration Commission of the State Council, has been identified by the Chinese government to lead the restructuring of the country's steel industry - an important priority for China's industrialisation and urbanisation.
Baosteel's standalone rating reflects its position as the leading high value-add steel producer in China. The company has strong market share in its major products such as cold-rolled (CR) auto sheet (with 50% market share), home appliance sheet (37%), and pipeline steel (33%). CR coil products, stainless steel products, and steel tubes contributed to 52% of revenues in 2009. Despite weak CR steel product prices in 2010, Baosteel continued to generate robust revenue and operating profit growth. The company's high average selling price (ASP) for its steel products of CNY6,300 in 2010, based on Fitch estimates, was 26% higher than in 2009, suggesting that Baosteel has continued to enhance its product offerings with high value-added steel products.
Baosteel has maintained a stable financial profile despite a volatile operating environment between 2007 and 2010, relative to other Chinese steel producers and most global steel companies. Baosteel's EBITDA margin ranged from a low of 14% in 2009 to a high of 18% in 2010, whereas Angang Steel Co Ltd's and Wuhan Iron & Steel Co's EBITDA margin over the same period ranged from 24% in 2007 to 12% in 2009 and from 24% in 2007 to 11% in 2010 respectively. Capex and dividend payment have been reduced in response to the decline in EBITDA in 2009, alongside working capital reduction, which helped reduce Baosteel's debt level. Adjusted net debt/operating EBITDAR fell to 1.52x for the LTM to September 2010 from 2.9x in 2009, after an improved operating environment lifted EBITDAR. Its EBITDA margin improved to 15.8% from 14% during the same period.
Fitch expects steel companies in 2011 at least to maintain their profitability as the steel price increase is likely to offset any raw material cost increases. Baosteel's strong market share in its major products suggests close working relationship with its customers, making it likely for the company to pass on any raw material cost increases to its customers. This is reflected in Baosteel's stable EBITDA margin.
The Stable Outlook reflects Fitch's expectations that the over-supply condition in the Chinese steel industry will improve with the government's restructuring drive and the restriction placed on building new steel plants. Aggressive capex and acquisition of production facilities resulting in declining unit profit or a higher debt burden, and in turn a net debt/EBITDAR exceeding 1.5x on a sustained basis may lead to negative rating action. The ratings may also come under pressure if BGC's support is insufficient to offset a deterioration in the credit profile of Baosteel or if state support for the company is deemed to have weakened. No positive rating action is envisaged in the next 12-18 months.
(sourced:Thomson Reuters)
Using Fitch's Parent and Subsidiary rating Linkage methodology, the 'A-' IDR incorporates a one-notch uplift to Baosteel's standalone rating, reflecting the strong linkages between its state-owned parent Baosteel Group Corporation (BGC) and the Chinese government. This is based on BGC's and Baosteel's strategic importance to the country and potential support from the Chinese government should it be required. BGC, being the largest steel company held by the state-owned Assets Supervision and Administration Commission of the State Council, has been identified by the Chinese government to lead the restructuring of the country's steel industry - an important priority for China's industrialisation and urbanisation.
Baosteel's standalone rating reflects its position as the leading high value-add steel producer in China. The company has strong market share in its major products such as cold-rolled (CR) auto sheet (with 50% market share), home appliance sheet (37%), and pipeline steel (33%). CR coil products, stainless steel products, and steel tubes contributed to 52% of revenues in 2009. Despite weak CR steel product prices in 2010, Baosteel continued to generate robust revenue and operating profit growth. The company's high average selling price (ASP) for its steel products of CNY6,300 in 2010, based on Fitch estimates, was 26% higher than in 2009, suggesting that Baosteel has continued to enhance its product offerings with high value-added steel products.
Baosteel has maintained a stable financial profile despite a volatile operating environment between 2007 and 2010, relative to other Chinese steel producers and most global steel companies. Baosteel's EBITDA margin ranged from a low of 14% in 2009 to a high of 18% in 2010, whereas Angang Steel Co Ltd's and Wuhan Iron & Steel Co's EBITDA margin over the same period ranged from 24% in 2007 to 12% in 2009 and from 24% in 2007 to 11% in 2010 respectively. Capex and dividend payment have been reduced in response to the decline in EBITDA in 2009, alongside working capital reduction, which helped reduce Baosteel's debt level. Adjusted net debt/operating EBITDAR fell to 1.52x for the LTM to September 2010 from 2.9x in 2009, after an improved operating environment lifted EBITDAR. Its EBITDA margin improved to 15.8% from 14% during the same period.
Fitch expects steel companies in 2011 at least to maintain their profitability as the steel price increase is likely to offset any raw material cost increases. Baosteel's strong market share in its major products suggests close working relationship with its customers, making it likely for the company to pass on any raw material cost increases to its customers. This is reflected in Baosteel's stable EBITDA margin.
The Stable Outlook reflects Fitch's expectations that the over-supply condition in the Chinese steel industry will improve with the government's restructuring drive and the restriction placed on building new steel plants. Aggressive capex and acquisition of production facilities resulting in declining unit profit or a higher debt burden, and in turn a net debt/EBITDAR exceeding 1.5x on a sustained basis may lead to negative rating action. The ratings may also come under pressure if BGC's support is insufficient to offset a deterioration in the credit profile of Baosteel or if state support for the company is deemed to have weakened. No positive rating action is envisaged in the next 12-18 months.
(sourced:Thomson Reuters)
Thursday, February 3, 2011
Russia's Evraz sees '11 EBITDA $3.0-$3.6 bln
Thu Feb 3, 2011 11:00 am GMT
MOSCOW(Reuters)
Evraz (HK1q.L: Quote), Russia's second largest steelmaker, expects its core earnings to reach $3.0-$3.6 billion this year, chief financial officer Giacomo Baizini said on Thursday.
"Analysts forecast our EBITDA between $3.0-$3.6 billion in 2011, and I have no reason to say that we will not achieve this," Baizini said at the Troika Dialog forum in Moscow.
Evraz, part-owned by billionaire Roman Abramovich, has not released earnings before interest, taxation, depreciation and amortisation (EBITDA) for 2010.
It is scheduled to report its 2010 results on March 31.
The executive also said 2011 capital expenditures will reach about $1.2 billion compared to $950 million last year.
(Reporting by Anastasia Teterevleva, writing by Alfred Kueppers, sourced: reuters)
MOSCOW(Reuters)
Evraz (HK1q.L: Quote), Russia's second largest steelmaker, expects its core earnings to reach $3.0-$3.6 billion this year, chief financial officer Giacomo Baizini said on Thursday.
"Analysts forecast our EBITDA between $3.0-$3.6 billion in 2011, and I have no reason to say that we will not achieve this," Baizini said at the Troika Dialog forum in Moscow.
Evraz, part-owned by billionaire Roman Abramovich, has not released earnings before interest, taxation, depreciation and amortisation (EBITDA) for 2010.
It is scheduled to report its 2010 results on March 31.
The executive also said 2011 capital expenditures will reach about $1.2 billion compared to $950 million last year.
(Reporting by Anastasia Teterevleva, writing by Alfred Kueppers, sourced: reuters)
Monday, January 31, 2011
Angel upgrades JSW Steel to `Buy`
Monday, 31 JAN2011
Angel Broking has recommended `Buy` on JSW Steel with a price target of Rs 1,047 as against the current market price (CMP) of Rs 898 in its report dated Jan. 29, 2011.
The broking house gave the following rationale:
Spot iron ore prices have continued to rise: Higher crude steel production has led to an increase in international spot iron ore prices to over USD 180/tonne. However, growth in production of iron ore in China has remained flat during the past quarter. Due to crackdown on illegal mining by the government, India`s iron ore prices have increased as well.
while coking coal prices have spurted recently: The flooding in Australia during December 2010-January 2011 has severely hit mining operations in Queensland, which accounts for 50% of the world`s coking coal trade, which has resulted in spurt in spot prices of coking coal since then. The rise in spot prices is likely to result in higher contract prices for 1QFY2012.
resulting in rise in steel prices recently: The steep rise in iron ore and coking coal prices has resulted in higher steel prices across the globe. However, steel production continues to rise globally, while there is lack of clarity on demand in western economies. We believe the rise in prices of key inputs will be more than offset by the increase in steel prices during FY2012. Hence, we expect profitability of companies with low levels of integration such as JSW Steel to decline in the coming few quarters.
Valuation: JSW Steel is expanding its capacity by 3.2 mn ton from the current level of 7.8mn tonnes, thus taking its total capacity to 11mn tonnes by FY2011. Furthermore, JSW Steel will become India`s largest steel company with total capacity of 14.3mn tonnes on successful completion of Ispat Industries acquisition.
We expect the company to reap benefits of economies of scale on account of large-scale production, which should slightly destroy per unit cost of production. Also, the commissioning of the beneficiation plant by March 2011 is expected to lower iron ore cost for the company by USD 10-30/tonne.
However, rise in prices of key inputs (particularly coking coal) is likely to result in profitability decline during FY2012. At the current market price (CMP) of Rs 898, the stock is trading at 7.5x FY2011E and 5.9x FY2012E EV/EBITDA.
Given the recent decline in the stock price, we upgrade the stock to Buy from Accumulate with a revised Target Price of Rs 1,047 (earlier Rs 1,310), valuing the stock at 6.5x FY2012E EV/EBITDA. We have increased our estimates for FY2012E to factor in higher realisations. However, we have lowered our EBITDA margin estimates for FY2012E to account for higher iron ore and coking coal costs.(sourced: IRIS Exclusive via myiris.com)
Angel Broking has recommended `Buy` on JSW Steel with a price target of Rs 1,047 as against the current market price (CMP) of Rs 898 in its report dated Jan. 29, 2011.
The broking house gave the following rationale:
Spot iron ore prices have continued to rise: Higher crude steel production has led to an increase in international spot iron ore prices to over USD 180/tonne. However, growth in production of iron ore in China has remained flat during the past quarter. Due to crackdown on illegal mining by the government, India`s iron ore prices have increased as well.
while coking coal prices have spurted recently: The flooding in Australia during December 2010-January 2011 has severely hit mining operations in Queensland, which accounts for 50% of the world`s coking coal trade, which has resulted in spurt in spot prices of coking coal since then. The rise in spot prices is likely to result in higher contract prices for 1QFY2012.
resulting in rise in steel prices recently: The steep rise in iron ore and coking coal prices has resulted in higher steel prices across the globe. However, steel production continues to rise globally, while there is lack of clarity on demand in western economies. We believe the rise in prices of key inputs will be more than offset by the increase in steel prices during FY2012. Hence, we expect profitability of companies with low levels of integration such as JSW Steel to decline in the coming few quarters.
Valuation: JSW Steel is expanding its capacity by 3.2 mn ton from the current level of 7.8mn tonnes, thus taking its total capacity to 11mn tonnes by FY2011. Furthermore, JSW Steel will become India`s largest steel company with total capacity of 14.3mn tonnes on successful completion of Ispat Industries acquisition.
We expect the company to reap benefits of economies of scale on account of large-scale production, which should slightly destroy per unit cost of production. Also, the commissioning of the beneficiation plant by March 2011 is expected to lower iron ore cost for the company by USD 10-30/tonne.
However, rise in prices of key inputs (particularly coking coal) is likely to result in profitability decline during FY2012. At the current market price (CMP) of Rs 898, the stock is trading at 7.5x FY2011E and 5.9x FY2012E EV/EBITDA.
Given the recent decline in the stock price, we upgrade the stock to Buy from Accumulate with a revised Target Price of Rs 1,047 (earlier Rs 1,310), valuing the stock at 6.5x FY2012E EV/EBITDA. We have increased our estimates for FY2012E to factor in higher realisations. However, we have lowered our EBITDA margin estimates for FY2012E to account for higher iron ore and coking coal costs.(sourced: IRIS Exclusive via myiris.com)
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