NAVANSEAugust 6, 2019

NAVA LIMITED

3,903words
64turns
10analyst exchanges
3executives
Management on call
Grk Prasad
EXECUTIVE DIRECTOR
Abhineet Anand
SBICAP SECURITIES LIMITED
Ashwin Devineni
- CEO and Mr. G RK Prasad -- Executive Director along with other members of the
Key numbers — 40 extracted
309 million
throw some light on the nature of swap and I believe the total amount which is under swap is USD 309 million, can you please confirm that. My third question is how is the offtake of NBEIL post the tie up wi
258 million
Ventures Limited August 09,2019 perspective you know for the year 2018-19 we have billed about $258 million and we have received $183 million which is approximately about 71%. If you go even further back
183 million
perspective you know for the year 2018-19 we have billed about $258 million and we have received $183 million which is approximately about 71%. If you go even further back say something synchronization say f
71%
we have billed about $258 million and we have received $183 million which is approximately about 71%. If you go even further back say something synchronization say from July 2016 to March 20 I 9 we
366 million
hronization say from July 2016 to March 20 I 9 we have billed $52 I million and we have received $366 million which is about 70%. The reason I am mentioning these numbers is because the situation of Maamba i
70%
016 to March 20 I 9 we have billed $52 I million and we have received $366 million which is about 70%. The reason I am mentioning these numbers is because the situation of Maamba in terms of receiv
25%
d these funds one to pay the contractors on time and two to also reduce our debt significantly by 25%. So, I think that needs to be set in perspective when we talk about Maamba receivables. As of d
194 million
talk about Maamba receivables. As of date the total overdue in terms of receivables is about USD 194 million and from what we hear the government and ZESCO are kind of working on paying those receivables in
Rs. 3
coal rejects and also sometimes slurry, but I think on an average you could say it could be about Rs. 3 toRs. 3.20 per unit. Mohit Kumar: Sir also one last question sir what is the interest cost for t
Rs. 3.20
ects and also sometimes slurry, but I think on an average you could say it could be about Rs. 3 toRs. 3.20 per unit. Mohit Kumar: Sir also one last question sir what is the interest cost for the qum1er o
30 million
r this year vis-a-vis last year? GRK Prasad: Obviously every half year would be repaying about $30 million to that extent interest cost, interest cost will come down. Mohit Kumar: If you could quantif
Rs. 800 million
aj: Sir, this QI FY20 is very much in consistent line with earlier QI FYI9, revenue is around Rs. 800 million, but can you segregate in our three ve11icals like power, ferro and other verticals that is one q
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Guidance — 15 items
Mohit Kumar
qa
“Firstly, can you please update on the status of Maamba receivables and have you heard anything you know which has happened in the quarter as something and outlook going forward.”
AshwinD.evineni
qa
“But we do not have exact timelines in terms of when that will be completed, but as they continue working the situation at Maamba is fine in terms of receivables which we are getting to meet our operational needs and also to service our debt.”
AshwinD.evineni
qa
“It is based on project finance where the lenders have taken project risk.”
B.V. Bajaj
qa
“Sir, last question if you permit, because of this Chinese versus US trade war and slowdown in the steel segment in India how do you feel the next quarter will be with respect to the Manganese and Ferro alloy business?”
Ashwin Devineni
qa
“So, we do not expect the situation to continue for a long time, but probably for a qum1er or couple of quarters some weakness is envisaged.”
Ashwin Devineni
qa
“But overall we expect a strong demand coming from the Indian steel sector giving us complete offtake possibility for our ferroalloys because we also have exp011 which we use more for an off-setting basis.”
Ajay Jain
qa
“25 crores towards the buyback from the public, but what about the balance buyback will there be any cost to it or it will be at face value?”
GRK Prasad
qa
“It will be at face value, but for the Employees Welfare Trust there could be recognition of capital gains depending on where the market price stands on the effective date of reduction but for that there is no cash outflow other than Rs.”
Anirban Dutta
qa
“The second question is what do you think will be the potential impact of this transition that is happening is on Konkola Copper mine for the next 3 to 6 months and the third question is what is the CAPEX plan for us for this current fiscal year?”
Ashwin Devineni
qa
“But for the intermittent I would say system backing down, we do not expect major issues in terms of power sales.”
Risks & concerns — 7 flagged
It is based on project finance where the lenders have taken project risk.
— AshwinD.evineni
Sir, last question if you permit, because of this Chinese versus US trade war and slowdown in the steel segment in India how do you feel the next quarter will be with respect to the Manganese and Ferro alloy business?
— B.V. Bajaj
Well it is very difficult to sustain this qum1erly performance, basically if what you are talking about is right.
— Ashwin Devineni
There has been some influence of US-China trade war on the steel industry per se and domestic steel slowdown is quite evident.
— Ashwin Devineni
The second question is what do you think will be the potential impact of this transition that is happening is on Konkola Copper mine for the next 3 to 6 months and the third question is what is the CAPEX plan for us for this current fiscal year?
— Anirban Dutta
I know it is a difficult one, but what are the other things that management is thinking if this continues for another one, two years, the debt repayment is fine and our O&M is fine but from equity shareholder perspective I N.AVA BHAFAT VENTURES UM1TED Nava Bharat Ventures Limited August 09,2019 think some value of equity also needed right, so what is the thought process from the Nava Bharat management and promoters' perspective.
— Abhineet Anand
As sponsors our concern is equity return, we are stressing a bit on seeing that the outstanding is reduced, and the monthly payment plan is obtained and sustained.
— GRK Prasad
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Q&A — 10 exchanges
Q
Sir I have three questions. Firstly, can you please update on the status of Maamba receivables and have you heard anything you know which has happened in the quarter as something and outlook going forward. My second question is, the interest rates swap, sir it creates a lot of volatility in a Maamba earnings, why is the interest rate swap not part of hedge accounting and is it possible to throw some light on the nature of swap and I believe the total amount which is under swap is USD 309 million, can you please confirm that. My third question is how is the offtake of NBEIL post the tie up with
AshwinD.evineni
I am just going to shed some light on the Maamba receivable situation because I am sure that a lot of you on the call have similar questions. Well just to kind of set the Nfi.',//\ BKJ\RAT VENTURES UM1TED Nava Bharat Ventures Limited August 09,2019 perspective you know for the year 2018-19 we have billed about $258 million and we have received $183 million which is approximately about 71%. If you go even further back say something synchronization say from July 2016 to March 20 I 9 we have billed $52 I million and we have received $366 million which is about 70%. The reason I am mentioning thes
Q
Sir, this QI FY20 is very much in consistent line with earlier QI FYI9, revenue is around Rs. 800 million, but can you segregate in our three ve11icals like power, ferro and other verticals that is one question sir. Second thing is on MCL still receivable is around 34% up to June ending 2019. So does it cmTy any interest burden for the delayed payment that is my query. Lastly the buyback how it is affected by post budget taxation on buyback structure?
GRK Prasad
Actually, segmental revenue has been posted on the website Mr. Bajaj, but just to give you a quick run. You can just note down the Ferro alloys was about Rs. 230 crores, Power is about Rs. 604 crores, Sugar is about Rs. 32 crores and Coal Mining is Rs. 78 crores and unallocated meaning the other income and other things constituting about Rs. 49 crores. This is gross and we have intersegment revenue of Rs. 198 crores. The second question is on interest cost. ZESCO, is invoiced interest on delayed payment, the interest is based on the rate prefixed in the PP A currently it stands at about 8% on
Q
My first question is about receivables of Maamba Collieries. You had reported in the last Quarter 4, receivables of 165 million. I have derived it from the billing minus the realization and this quarter you have receivables of 211 million. So, there is an increase by 46 million of receivables whereas the billing of this quarter is 56 million. So, you have received only 10 million of billing for this quarter am I right in assuming that?
GRK Prasad
Well I think you need to look at the situation from a monthly receivable perspective. For example, the June receivable came in early part of July so that was not accounted which is about I 0 million. So, on an average the company has been receiving about $9 million against whatever it has been billing. So, the position as reported by CEO is the overdue position which is USD 194 million as against outstanding receivable of about 215 million as on 301 h June 2019. But I assume the similar situation would have been there in Quarter 4 also you would have? In Q4, we received the payments a little a
Q
I have three questions to ask. The first question is have there been any meaningful tariff hikes in Zambia both for the mining and residential & commercial customers? The second question is what do you think will be the potential impact of this transition that is happening is on Konkola Copper mine for the next 3 to 6 months and the third question is what is the CAPEX plan for us for this current fiscal year?
Ashwin Devineni
With respect to the tariff hikes there has been periodic tariff hikes with respect to the mining sector that has taken place in the past few years, however for residential and commercial there are talks currently undergoing about hike but that has not been implemented yet. And would you hazard a guess by when this could be done because this is the key factor which will impact the cash flows of the utility company there? Yes, I hope you know definitely the utility company and the government also realize that because apart from the mining sector, 50% of the revenues come from commercial and resi
Q
Sir one information which you have been giving so far PAF number for Maamba it is missing sir, is it possible to share it right now?
Ashwin Devineni
It is about 8 I% for the qum1er.
Q
Sir I wanted to know how the situation of domestic utilities in India and are we seeing green shoots or we are likely to operate it lower utilization in this fiscal year?
Ashwin Devineni
On the other hand, we may probably be doing better than last year because the Telangana distribution companies have provided a contract, but on surplus power both from our captive power plant of 114 megawatts as well as the subsidiary plant of I 50 megawatts till March 2020. But for the intermittent I would say system backing down, we do not expect major issues in terms of power sales. We are in fact looking forward to a slightly better PLF than last year. If you could see the first quarter itself the 150 megawatts plant did a PLF of about 75% which was for in excess of last year's average. Si
Q
On the domestic fi·ont I think on a YoY basis things seem to have improved if I can call that from the power demand supply and merchant because Telangana has given us a contract. From a slightly longer term perspective let us assume 2 years, 3 years' perspective do you think that demand of power or the growth in the power demand is going to be higher and hence contracts will come for renewal in future as well because I think earlier we used to have, then last year we did not have on a short term basis. So I just want to understand more from a holistic picture or more fi·om power demand and mer
GRK Prasad
Basically, we probably are slightly heartened with the latest measures that are taken by the government in terms of putting distribution companies on a better footing financially. So, that actually gives us confidence that power purchase will be sustained and going forward that is the expectation also given that in Telangana a lot of latent demand is there which could propel this kind of demand push. So, our expectation is that Telangana Distribution Companies could come up with another tender probably in early next year for 2020-2021. Secondly, if you can also throw some light on how is the m
Q
Sir, the ferrochrome conversion I think it is expiring in March 2020, have we heard fi·om Tata Steel? Are we working on extending this commercial arrangement?
GRK Prasad
Their current lease expires on 31 51 March, 2020, but we have to see whether their area would be coming up for auction. I am sure Tata would be very keen to participate and probably are in a much better footing in terms of obtaining or continuing the lease fi·om the government as well. So, I think it will be known Mohit in the next two to three months.
Q
I just wanted one clarification in the mining segment the profits this quarter are very high of the order of around Rs. 20.5 crores, so is this sustainable? What has driven this kind of profit in the mining segment and is it sustainable?
Ashwin Devineni
See mining operations keep fluctuating on a quarter-on-quarter basis based on the actual output of high grade coal in the new block that has been opened. In the last quarter we have had a better sale quantum as well as slightly improved sale price as well that accounted for it, but we cannot say that can be extrapolated for the next Nf;,Vl\ BHARAT VE~{TURES Nava Bharat Ventures Limited August 09,2019 three quarters, but a reasonable growth is expected in terms of coal mining operations over the last year's number. In this scope sir if we were to take more than a year's view, can this number go
Q
I would like to thank the management and all the participants for attending this call. Thanks everyone.
Management
Speaking time
Moderator
12
GRK Prasad
12
Ashwin Devineni
12
Anirban Dutta
7
Abhineet Anand
5
Mohit Kumar
5
Ajay Jain
4
B.V. Bajaj
2
Bhavesh Chauhan
2
Ashwin Oevineni
1
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Opening remarks
Abhineet Anand
Hi, Good Morning everyone. We welcome you to Ql FY20 post results Conference Call ofNava Bharat Ventures. From the management, we have Mr. Ashwin Devineni -- CEO and Mr. G RK Prasad -- Executive Director along with other members of the top management. I will hand over to the management for opening remarks. Over to you, sir.
Ashwin Oevineni
This is Ashwin a very good morning and a warm welcome to all the participants. The statement of the financial results both on the standalone and consolidated basis and a press release detailing the operations of the Nava Bharat Ventures Group for Q I FY20 has already been filed with the stock exchanges and posted on our website. I hope you have had a look at them and trust that they provide adequate information on our performance for the quarter ending 30111 June, 20 I 9. Given the above, we would now like to proceed with the question and answer session and request you all to see clarification as you may desire. Thank you.
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