Welspun Gujarat crosses coveted $ 1 billion mark



BUSINESS UPDATE January 28, 2015 Steady performance - Order book more than 900K MT

Welspun Corp Ltd. (WCL), the flagship Company of the US$ 3 billion Welspun Group, announced its consolidated financial results for the nine months and third quarter ended December 31, 2014.

Consolidated Performance Highlights:

Figures in Rs. million unless specified

9M FY15

9M FY14

Q3 FY15

Q2 FY15

Q3 FY14

836

787

Pipe Production (K MT)

297

327

198

860

817

Pipe Sales (K MT)

305

339

233

60,754

61,702

Income from Operations

22,497

23,981

17,420

5,371

6,485

EBITDA

2,425

2,123

1,737

4,853

7,199

Operational EBITDA

2,107

2,195

995

2,131

2,302

Finance Cost

728

722

709

3,177

3,125

Depreciation and Amortisation

1,097

990

1,050

63

1,057

PBT

601

411

(22)

(747)

608

PAT after Minorities & Associates

175

53

75

3,069

4,848

Cash PAT

1,538

1,512

565

Notes: a) Operational EBITDA = Reported EBITDA - Non-operational income - Unrealised forex gain/(loss)

b) Cash PAT = PBT - Current tax + Depreciation - Post-tax Unrealised forex gain/(loss)

c) Prior period figures have been restated, wherever necessary

Production and sales of pipes in the last quarter were significantly better than in Q3 last year. Volumes were higher in the USA operations where the Spiral mill is ramping up post maintenance in the first quarter of this fiscal. Production and sales of pipes in the Saudi operations were lower than in the last quarter. Domestic deliveries of HSAW pipes for the water segment continued during the quarter.
Total order book at the end of the quarter remains robust around 930K MT - valued at about Rs.66 billion.
Net sales in Q3 FY15 were lower compared to the previous quarter, primarily due to lower volumes while realisation remained broadly similar. However, we are still on course for the full year.
Gross debt at the end of December, 2014 was Rs.39,592 million; lower than the Rs.41,375 million at the end of last quarter. However, with decline in cash and cash equivalents, net debt at the end of December,
2014 was higher at Rs.28,572, compared to Rs.23,458 million at the end of the last quarter. The increase in net debt was primarily on account of working capital build up during the quarter; which is expected to
unwind by the end of this fiscal year.

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BUSINESS UPDATE Business outlook:

The recent drop in energy prices has not yet had any significant impact on the gas pipeline projects in North America. In fact, in the last few weeks some of the key gas pipeline projects have received the go ahead. Cancellation of a large pipeline project in Europe has put a strain on manufacturers in that region. However, there could be potential business opportunities from alternate pipelines. MENA region is expected to face headwinds due to increased competition and lower project spending, especially in the oil and gas segment. India looks promising in the medium term with the activities for the pipeline projects expected to commence soon.
Commenting on the results, Mr. B. K. Goenka, Chairman, Welspun Corp said, "Despite the recent sharp fall in crude oil prices, existing pipeline projects have been unaffected. We are seeing relatively stable activity levels in the major customer regions in terms of incoming enquiries. The thrust in India on building infrastructure and improving sanitation should also translate into increasing demand for pipes. We have order book in excess of 900K MT, and looking at the projects we have already bid, we remain confident of stable mill utilisation levels in the forthcoming year."

About Welspun Corp Ltd. (WCL)

Welspun Corp is a one-stop service provider offering complete pipe solutions with a capability to manufacture line pipes ranging from ½ inch to 140 inches, along with specialized coating, double jointing and bending. With current capacity of 2.425 million MTPA in Dahej, Anjar and Mandya in India; Little Rock in the USA and Dammam in Saudi Arabia, Welspun takes pride in being a preferred supplier to most of the Fortune 100 Oil & Gas companies. With 360 degree abilities, Welspun Corp has undertaken some of the most challenging projects in different parts of the world. With business excellence being a clear focus, the company is on the path of innovation and technology edge supported by its state-of-the-art facilities and
global scale operations. For more information, please visit www.welspuncorp.com.
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DISCLAIMER:

The information in this release has been included in good faith and is for general purposes only. It should not be relied upon for any specific purpose and no representation or warranty is given as regards to its accuracy or completeness. No information in this release shall constitute an invitation to invest in Welspun Corp Ltd. or any of its affiliates. Neither Welspun Corp Ltd., nor their or their affiliates' officers, employees or agents shall be liable for any loss, damage or expense arising out of any action taken on the basis of this release, including, without limitation, any loss of profit, indirect, incidental or consequential loss.

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