JSW Steel today reported over 53% decline in standalone net profit to Rs 269 crore for the quarter ended June 30, 2012, largely due to hefty foreign exchange loss of Rs 592 crore and increase in finance cost.
The company had reported net profit of Rs 578.32 crore during the April-June quarter of 2011-12.
Net sales of the company, however, were up 27.73% to Rs 9,039.17 crore during the first quarter, 2012-13 vis-a- vis Rs 7,069.38 crore of April-June period of FY12, it said in a filing to the BSE.
Besides the forex loss of Rs 592 crore, the company also reported over 78% increase in its interest outgo of Rs 406.66 crore during the quarter.
"Due to the unusual depreciation in the value of the rupee against US Dollar during Q1 of FY13, the net loss of Rs 592 crore on restatement of foreign currency monetary items at close of the quarter has been considered by the company to be exceptional in nature," JSW said in a separate statement.
During the April-June period, the company reported its highest ever quarterly production of crude steel at 2.14 million tonnes, up 27% from the previous year's levels.
However, availability and quality of iron ore in E-auction in Karnataka, where it operates a 10 MT per annum plant, remained a bottleneck during the first quarter due to "reduced inventory in stock pile being auctioned and delay in reopening of Category "A" mines", it said.
The situation led to loss of production and increase in cost and its plant could operate at about 80% capacity only during the first quarter, it added.
The company said it expects demand growth to remain subdued and weakness in prices of major inputs like iron ore and coal will keep global steel prices range bound.
Talking about the Indian scenario, JSW said it is challenging at present due to weak monsoon and slowdown in industrial activities and investments. However, it expects that the government will be going for economic reforms and in that case, the medium and long-term steel consumption would remain intact.
Following the announcement of the results, the company's scrip was trading at Rs 649.95 towards the close of trade on the BSE, down 2.87% from the previous close.