Mumbai: With a sluggish economy and muted government spending contributing to softening demand, India’s second largest private steel producer JSW Steel Ltd, on Friday reported yet another poor quarter of earnings.

Consolidated net profit for the integrated steel maker fell 57% year-on-year to 1,008 crore in the June quarter, pushed down by lower steel prices and poor demand.

Despite the dismal quarter, the company is optimistic about government spending reviving in the second half of the financial year. “July-September is generally sluggish for the steel sector because of the monsoon. We’re waiting for the government thrust in public infrastructure to pick up in the third quarter," M.V.S. Seshagiri Rao, joint managing director and group chief financial officer, JSW Steel, told reporters. “We believe we’ve seen steel prices bottom out."

Rao maintained the full year’s guidance of 16.95 million tonnes (mt) of steel production and 16mt in sales.

Consolidated revenue from operations fell 3.5% during the quarter to 19,812 crore from 20,519 crore a year ago. Steel sales fell 2% to 3.75mt, even as the company kept production up. Crude steel rose 3% year-on-year to 4.24mt.

As a result, JSW’s steel inventory (unsold products) rose by 300,000 tonnes on a year-on-year basis, with a total inventory of 1.2mt.

Operating Ebitda fell 27% from 5,105 crore a year earlier to 3,716 crore in the June quarter. Earnings before interest, taxes, depreciation and amortization, or Ebitda, margin was at 21.3%. The company increased its share of exports by 34% year-on-year to 620,000 tonnes. Exports accounted for 17% of total shipments.

“Private expenditure will take a while to pick up, but we expect the public infra space investments to pick up," Jayant Acharya, director - marketing, JSW Steel said. “Projects like the Mumbai-Nagpur highway and the related townships, the bullet train project, bulk water transmission projects...we’re seeing allocations to this happen and government keen on implementing this."

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