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JSW Steel has reported a consolidated net profit of Rs 296 crore for the quarter ended March, against Rs 770 crore in the corresponding period last year, a fall of 62 per cent.
The company attributed the decline in profit to high interest and depreciation resulting from the three-million-tonne (mt) expansion project commissioned. The project hasn’t started operations yet due to non-availability of iron ore.
The company’s gross sales dropped two per cent to Rs 10,675 crore, while operating earnings before interest, tax, depreciation and amortisation (Ebitda) declined eight per cent — from Rs 1,887 crore in the year-ago period to Rs 1,733 crore. The company said, “The operating Ebitda margins for the fourth quarter improved to 18.3 per cent compared to 17.3 per cent in corresponding period last year, despite the fall in steel prices, primarily on account of innovative coal blend and sourcing efficiency.”
On the current iron ore scenario in Karnataka, Chairman and Managing Director Sajjan Jindal said, “We expect in six months, the iron ore situation would improve dramatically. We are cautiously optimistic.”
He added the company had set a target of 9-10 per cent growth in volumes and sales this financial year.
In year ended March, JSW Steel produced 8.52 mt of steel, with average capacity utilisation of 80 per cent. The company had set a target of selling nine mt, but managed only 8.87 mt.
Seshagiri Rao, joint managing director and group chief financial officer, said, “Despite non-availability of iron ore, we managed to meet our targets. There is no reason why 10 per cent growth this year is not achievable.”
As of March-end, the company’s net debt stood at Rs 19,533 crore, against Rs 20,210 crore a year earlier.
Though JSW Steel’s iron ore mines in Chile continue to be profitable, with Ebitda of $14.21 million, the company faced delays in securing permits for its coal mines in the US. The JSW Steel plate and pipe mill in the US continues to perform below expectations.
