MUMBAI : JSW Steel Ltd, India’s second largest private steel company, missed profit estimates for the December quarter by a wide margin, mainly on account of low steel prices.

The company reported a consolidated net profit of 187 crore for October-December, 88% lower than the 1,603 crore in the year-ago period.

While standalone profit was at 691 crore, the consolidated numbers were dragged down by losses at its overseas subsidiaries, particularly in the US and Italy.

A Bloomberg poll of nine analysts had estimated JSW Steel’s consolidated revenue at 17,686.5 crore for the quarter under review, while a poll of five analysts had estimated net profit of 421.4 crore.

Revenue from operations fell 11% year-on-year to 18,055 crore. Crude steel production was 4.02 million tonnes, rising 5% from the September quarter. Steel sales rose 13% quarter-on-quarter to 4.03 million tonnes. The company’s management maintained its FY20 guidance of 16.5 million tonnes of steel production and 15.5 million tonnes (mt) of sales. “To achieve the current year’s guidance, we still need to produce 4.4 mt of steel and sell 4.25 mt. We’re confident we can do this in the fourth quarter considering demand has improved in the marketplace," M.V.S. Seshagiri Rao, group CFO, JSW Steel, said.

The third quarter was affected by a dramatic fall in local steel prices, while automotive contracts were renewed at lower levels.

As a result, blended net sales realizations (the weighted average price of steel sales) fell 7% sequentially, and 23% year-on-year, in the December quarter. Consolidated operating EBITDA per tonne was 6,622 in Q3FY20, compared to 7,767 in Q2FY20 and 12,224 in Q3FY19.

Rao, however, said that both demand and prices have picked up since November, improving sentiment for the fourth quarter. Net debt fell marginally to 49,550 crore at the end of December, while the net debt-to-equity ratio stood at 1.35.

The company said major capital expenditure projects have been delayed by 3-6 months, particularly the expansion of the 5-million-tonne-per-annum Dolvi plant, because of a severe and prolonged monsoon last year. The commissioning date for the Dolvi plant has been pushed from March 2020 to the first half of FY21.