Steel major JSW Steel today reported a 29.5 per cent fall in net profit at Rs 328.94 crore for the quarter ended December 2014 due to lower steel prices and higher finance cost.
The company's net profit stood at Rs 466.49 crore in the same period in 2013.
Total income also decreased to Rs 13,222.95 crore in third quarter from Rs 13,622.77 crore for the same period in 2013.
The company's finance cost shot up to Rs 936.5 crore from Rs 789.33 crore in the same period last year, while other income declined 10 per cent to Rs 12.99 crore in December quarter.
During the December 2014 quarter, the company reported crude steel production of 3.17 million tonnes while saleable steel sales volume stood at 3.03 million tonnes.
"The sluggish demand in the domestic market has led to falling steel prices. The rise in imports from China and Russia along with elevated input costs also put pressure on the company's performance in the December quarter," JSW Steel, Joint Managing Director and Group Chief Financial Officer, Seshagiri Rao told reporters here.
Gross turnover and net sales for the nine-month stood at Rs 43,038 crore and Rs 39,686 crore, respectively, both showing a growth of 9 per cent on year-on-year (YoY)basis. The operating EBITDA for the nine months was Rs 7,720 crore, up by 16 per cent on YoY basis. The company posted a net profit of Rs 1,734 crore for the nine month period.
The implementation of ongoing projects like CAL-2 and electrical steel complex at Vijayanagar and capacity expansion project from 3.3 MTPA to 5 MTPA at Dolvi are progressing satisfactorily, and is likely to complete as per schedule, Rao said.
Regional HRC prices remain under pressure driven by low demand, sharp correction in iron ore prices and currency fluctuation. Indian crude steel production increased by 3.9 per cent YoY during the quarter. The apparent steel consumption rose by 3.7 per cent YoY during the quarter amidst the subdued economic activities.
However, consumption of domestically produced steel fell by 6.6 per cent YoY as imports increased by 142.3 per cent YoY.
Indian steel industry continues to suffer from surge in imports especially from China, Korea, Japan and CIS. At the same time, the industry continues to grapple with constrained iron ore availability and domestic iron ore prices remains sticky and elevated in contrast to a sharp correction in iron ore prices in seaborne markets.
In India, overall activity levels have remained subdued, though the new government has shown good intent and is working on various measures to kick-start the economic recovery - much is now hinged upon actual uptick. Benign inflation, lower commodity price outlook, and a reversal of monetary tightening cycle should bode well for FY16 economic outlook, the company official said.
