JSW Steel reported a net profit (after tax) of Rs 691.3 crore for the second quarter ended September 30, 2012. This included Rs 423.8 crore of forex gains.
Analysts had predicted massive gains for the company, due to rupee appreciation in the last quarter.
“Due to 6.4 per cent appreciation in the value of the rupee against the 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 company said in a statement.
The net sales of JSW Steel during the given quarter were up 16 per cent, to Rs 9,475.2 crore versus Rs 8,133.9 crore in the same period last year. Pure earnings, or Ebitda (earnings before interest, taxes, depreciation and amortisation), stood at Rs 1,531 crore.
In a statement, JSW Steel said: “Global economic situation continues to remain challenging with increasing uncertainties, impacting the prospect of economic growth across geographies. IMF projects the world economy to grow at 3.3 per cent. The Indian economy is expected to get back in growth mode post recent economic reform announcements.”
The Indian steel industry has witnessed a subdued demand growth of 2.8 per cent during the July-Sep 12 period, compared to 7.7 per cent in the previous quarter, coupled with rising imports mainly from countries with whom India has signed free trade agreements (FTAs). “Whilst domestic steel demand is expected to be steady, rising imports and availability of mineral resources will be major deterrents depriving Indian steel industry of a level playing field vis a vis their global peers,” the company said in the statement.
JSW Steel has been demanding that the Centre exclude steel from the FTA list with countries such as Japan and South 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 per cent and 21 per cent, 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 US-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 per cent. 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.
