JSW Steel net profit increases 179% to Rs 2,338 cr as sales improve

Capacity utilisation at Indian operations was at 92% compared to 96% in Q4 FY23 due to maintenance shutdowns

JSW Steel reported on Friday a 179 per cent year-on-year (YoY) rise in consolidated net profit at Rs 2,338 crore in the June quarter (Q1 FY24) on the back of higher sales and lower raw material cost. Net profit was Rs 838 crore in the year-ago period.

Consolidated revenue from operations was at Rs 42,213 crore, higher by 10.83 per cent as sales increased. Steel sales in Q1 FY24 stood at 5.71 million tonnes (mt), higher by 27 per cent YoY.

A Bloomberg estimate had pegged the company’s revenue at Rs 38,394 crore and net income adjusted at Rs 1,160 crore. The cost of materials consumed in the quarter was at Rs 23,281 crore, compared to Rs 25,597 crore a year back.

 

Sequentially, revenue and profit were lower by 10.11 per cent and 36.19 per cent, respectively. The company attributed the decline to lower sales volumes and higher cost of iron ore. The sequential decline was partially offset by a marginal increase in realisations on the back of higher export prices and higher EBITDA from overseas operations.

JSW Steel’s capacity utilisation at Indian operations was at 92 per cent compared to 96 per cent in Q4 FY23 due to maintenance shutdowns.

Among overseas subsidiaries, JSW Steel Ohio reported an EBITDA of $2.60 million in Q1 FY24 compared to a loss of $12.08 million in the previous quarter. JSW Steel Ohio had an EBITDA of $1.14 million in the year-ago period.

The US Plate and Pipe Mill recorded an EBITDA of $ 44.96 million in the quarter as against $25.73 million in the previous quarter and $33.06 million in the year-ago period.

JSW’s Italy operations, Piombino, reported an EBITDA profit of euro 18.6 million for the quarter. It was at euro 13.41 million in the previous quarter and euro 4 million in the year-ago period.

The company said that the global economy is resilient in 2023 despite the challenges of persistent core inflation, tight monetary policy, and weakening demand.

A quick reduction in inflation could provide some upside in the US. “The Euro area is witnessing a recovery in economic activity on the back of falling inflation and energy costs,” the company said, adding that further rate hikes and weak external demand were headwinds for faster recovery.

India remains well placed in the global economy but an uneven monsoon and global slowdown were key risks for the economy, it said.

JSW’s capex spend was Rs 4,094 crore in Q1 FY24, against a planned capex spend of Rs 18,800 crore for FY24.

JSW is on course to achieve a capacity of 37 mt by FY25. The current capacity is 28.2 mt and there are plans to scale it up to 50 mt by the end of the decade.

JSW’s net debt increased to Rs 66,797 crore during the quarter from Rs 59,345 in the March quarter, driven by higher working capital. Net debt to EBITDA stood at 3.14x as against 3.20x at the end of Q4 FY23.