The net profit of JSW Steel for the second quarter ended September 30, 2012 jumped to Rs 691.25 crore as against a net loss of Rs 669.32 crore. This net profit included Rs 423.77 crore of forex gains.
Analysts did predict massive gains due to rupee appreciation in the last quarter.
JSW Steel said, “Due to 6.4% appreciation in the value of the rupee against US Dollar during Q2 FY 2012-13, the gain of Rs 422 crore on restatement of foreign currency monetary items at close of the quarter credited to profit & loss account, has been considered by the Company as exceptional in nature.”
The net sales during the given quarter were up by 16%, to Rs 9,475.24 crore versus Rs 8,133.93 crore in the same period last year. Pure earnings, or EBITDA, stood at Rs 1531 crore.
In a statement, the company said, “Global economic situation continues to remain challenging with increasing uncertainties, impacting the prospect of economic growth across geographies. IMF projects World economy to grow at 3.3%. The Indian economy is expected to
get back in growth mode post recent economic reform announcements.”
Indian steel industry has witnessed a subdued demand growth of 2.8% during the period Jul–Sep 12 vis a vis 7.7% in the previous quarter, coupled with rising imports mainly from FTA countries. “Whilst, domestic steel demand is expected to be steady, rising imports and availability of mineral resources will be major deterrents depriving Indian Steel industry a level playing field vis a vis their global peers,” the company said.
JSW Steel has been at the forefront at demanding the central government to exclude steel from the FTA list with countries like Japan and Korea. However, the demand has been shot down by the government.
As far as the subsidiaries of JSW Steel go, its US operations continue to languish and the capacity utilisations at its plate and pipe mill stood at 31% and 21%, respectively, in the second quarter.
From its iron ore mines in Chile, the company made two shipments aggregating 0.15 million tonne and the coal mines in the USA made shipments of 0.02 million tonne.
JSW Ispat Steel, which is in the process of being merged with JSW Steel produced 0.64 million tonne steel in the second quarter and its capacity utilisation stood at 78%. JSW Ispat reported a net profit of Rs 122 crore in the quarter ended September 30, 2012 after considering exceptional items credit of Rs 235 crore which includes forex gain of Rs 158 crore and write back of provision of Rs 105 crore.
The net debt gearing stood at 1.04 which was marginally lower sequentially.