JSW Steel swings to profit in Q3
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New Delhi: JSW Steel Ltd on Tuesday reported a higher-than-expected net profit in the third quarter ended 31 December, helped by strong sales.
Consolidated net profit in the quarter stood at Rs730.05 crore compared with a net loss of Rs709.09 crore a year ago. Revenue from operations rose 58.8℅ to Rs15,097.24 crore from Rs 9,505.24 crore a year earlier.
Seventeen analysts polled by Bloomberg had expected JSW Steel to report a consolidated net profit of Rs.352.20 crore on revenue of Rs.13903.20 crore.
Total expenses rose 41.5℅ to Rs.13,360 crore during the third quarter. Finance costs too rose by 3.5℅ to Rs.920.11 crore.
The company maintained its fiscal full-year outlook of 25% growth in volume, to 15.75 million tonnes per annum (MTPA) of crude steel, and sales of 15 MTPA of saleable steel. It plans to have 40 MTPA of steel-making capacity by 2025.
JSW Steel said in a statement that during the quarter, it recorded crude steel production of 3.86 million tonnes and saleable steel sales of 3.64 million tonnes, both growing by 43℅ from the previous year.
The third quarter saw high volatility in iron ore and coal prices due to India’s demonetisation initiative, the change of guard in US, and the referendum in Italy, joint managing director and group chief financial officer Seshagiri Rao said.
India’s crude steel production in the first three quarters of the fiscal increased by 8.8℅ year-on-year, but finished steel consumption grew only 3.4℅ in the same period, JSW Steel said in the statement. “At the same time, the imports have surged to about 10 MTPA (million tonnes per annum) on an annualized basis in December 2016...The tepid steel demand reflects weak investment cycle,” the statement said.
The unprecedented inflow of steel imports from China, Japan, South Korea and Russia have hurt steel producers such as JSW Steel, forcing domestic steel companies to take a series of price cuts, squeezing margins.
JSW Steel’s shares closed up about 1% to Rs.198.40 on the BSE on Tuesday, while the benchmark Sensex fell 0.70% to 27,655.95 points.