The year 2015-16 .cautiousoptimism at JSPL was one of exercised caution during theyear because the external environment was volatile and largely unpredictable. Internallywe successfully increased our production capacity improved and implemented multipleinitiatives to enhance our preparedness for JSPLs resurgence in the steel and powersector. We are today more equipped and confident that our foresight is taking us towardscapacitiesefficie the right direction.Bolstered by enhanced processes and supportivegovernment policies we are committed to take JSPL to a new height ofoperationalexcellence financial robustness and long-term sustainability.
Global economic recovery during the year remained sluggish fragile and uninspiring.In advance economies the recovery was modest and largely uneven. The US economy performedwith resilience supported by relatively easy financial conditions with strengtheninghousing and labour markets. In the Euro area robust private consumption supported bylower oil prices and easy financial conditions outweighed the weakening net exports.
The scenario for emerging markets and developing economies is not very encouragingeither. China is on a rebalancing mode; it is navigating a momentous but complextransition towards a more sustainable growth. Given Chinas important role in globaltrade the rebalancing efforts can have substantial spill-over effects especially onemerging market and developing economies.
India continued to be one of the most attractive economies by common consensus. DuringFY 2015-16 the economy grew by 7.6% and the government took considerable measures tousher in a culture of fiscal consolidation. The government is focusing on across the boardreforms to spearhead infrastructure development in railways roads and highways as well asthe power sector to build a broad-based foundation for accelerated socio-economicdevelopment.
In this context it is pertinent to mention that the governments Make in Indiainitiative has been a resounding success. It has encouraged domestic entrepreneurship tocompete at a global scale and even attracted FDI to the country significantly. In theprocess 17-monthperiod(October2014toFebruary efficiencies 2016) after the launch of Makein India FDI inflows have increased by 37% (Source: Ministry of Commerce and Industry).
The government has already announced its first list of 20 smart cities that will smartsolutions such as assured power and water supply sanitation and solid waste managementefficient urban robust IT connectivity e-governance citizen safety among others. Thegovernment has also implemented the Ujwal DISCOM Assurance Yojana (UDAY) for financialturnaround and revival of power distribution companies (DISCOMs) which will ensureaccessible affordable and available power for all. Besides the government has alsoresolved the issues regarding the transfer of mining leases and grant of forest clearancesto the winning bidders of coal blocks. The Deendayal Upadhyaya Gram Jyoti Yojana (DUGJY)is also expected to provide electricity to thousands of villages languishing in darknessacross India. As one of Indias prominent player in the steel and power business weare encouraged by these initiatives; and see a larger role ourselves in the graduallyimproving steel and power scenario in India.
At JSPL we have always been focused on the India-first strategy; and our overarchingobjective is to take Indian expertise and entrepreneurship to the global centre stage. Weare aware that there are short-term challenges in our journey; but we are steadilybuilding our overall resilience against headwinds to grow sustainably in a world marked byvolatility complexity and uncertainty. As a part of that strategy we implementedmultiple initiatives during the year.
We re-organised and re-engineered our business to optimise cost enhance capitalefficiency and productivity of our workforce We also strengthened our consolidated steelproduction and sales significantly; achieved breakthrough order and deliveries; focused onnew product development; and also accomplished important milestones in our power business.It is indeed heart-warming to note that despite challenges JSPL is today among thefrontrunners in the global steel domain.
During 2015-16 we have witnessed unprecedented challenges owing to declining commoditycycle. We remained steadfast to the belief to counter these challenges with resilience.This we reflected through our strong operational performance. Our revenues stood at Rs18632 crore and EBITDA at Rs 3633 crore in the fiscal and we registered an EBITDA marginof 19%.
We maintained growth in our steel production and sales volumes. But our operatingprofit dipped owing to decline in Net Sales Realisation (NSR)whichcontinued to be underpressure due to unabated import of steel from China Korea and other countries for mostpart of the fiscal.
But the year 2015-16 ended on a positive note. We saw good recovery of steel prices inthe domestic market which for the past 18 months had slumped to an all-time low. forMoreover introduction of minimum import price (MIP) also helped to curb the rapidlygrowing imports at predatory prices.
Our net profitwas impacted on account of the additional coal levy of over Rs 3300crore arising out of the cancellation of coal blocks by the Honourable Supreme Court ofIndia; and enhanced finance cost due to borrowing. More importantly demand was stagnantfor most of the year; and the marginal demand growth benefited the importers. Theindigenous steel producers failed to become true beneficiariesof the fledgling demandgrowth.
SOME OF OUR KEY ACHIEVEMENTS OF FY 2015-16:
Our steel melting shop at Raigarh facility produced a record 10000 tonnes of crudesteel in a single day. This exemplary vity in our productionbasedonDRI(DirectReduced Iron)and hot metal is a testimony of our operational excellence in steel making. Thisreiterates our commitment towards setting new benchmarks in the steel sector.
We commissioned a 1.4 MTPA Rebar Mill in Sohar Oman the largest in the Gulf andAfrican Region. This enabled Jindal Shadeed to become the largest integrated steelmaker inOman with a 2 MTPA Steel Melting Shop (SMS) and 1.4 MTPA Rebar Mill.
We dispatched Indias longest ever 260 metre rails to a dedicated freight corridorrailway line. Our ability to make the worlds longest single piece rail of 121 metrelength has received a reckoning as a World Record. The commissioning of our head hardeningrail facility in Raigarh has made us Indias first and only private sectorsteelmaker manufacturing head hardened rails. In line with the Governments Make inIndia initiative we are strategically positioned to participate in the expansion ofrailway infrastructure in India and export our rails to global customers. Our commitmentto the credo of Making in India for India and the world is vindicated by ourefforts to strengthen our global presence and enhance exports to various countries.
Inspired by the vision of our founder Shri O.P. Jindal we at JSPL have always tried tointegrate our business priorities with community aspirations. Wide-ranging communityinitiatives have always been one of the pillars of our holistic sustainability strategy.From community healthcare and education to developing skill and vocational trainingthereby generating sustainable livelihood options to promoting art and culture JSPL iscommitted to deliver consistently on the expectations of the wider stakeholder fraternity.
When we look at JSPL today we find that it has been a year of great transition for theCompany. I am confident that we will have a more promising year ahead of us in view of thestrategies we have undertaken the gradually developing core operative sectors; andIndias march towards inclusive growth and prosperity. I seek the support andcooperation of all our stakeholders to strengthen JSPLs mandate to help create aprogressive and prosperous India.