Mumbai: JSW Steel, the country’s second largest steelmaker, cut its FY21 production guideline marginally from the previous fiscal and estimates that capacity utilisation at its plants would remain at around 89% for the full year.
JSW Steel has slashed its production guidance to 15 million tonnes (mt) of saleable steel and 16 mt of crude steel for FY21, down from FY20 actuals of 15.08 mt and 16.06 mt respectively. The company said that workforce remobilization will be a key challenge for core sectors of the economy after the national lockdown is lifted; however, lower energy prices and expectations of a normal monsoon are positive for consumption outlook. A gradual recovery in economic activities is expected in the second half of FY21.
JSW slashed its total planned capital expenditure spend for FY21 from the earlier guidance of ₹16,340 crore to about ₹9,000 crore.
JSW Steel reported an 87% fall in consolidated net profit in March 2020 quarter at ₹188 crore as compared to ₹1,495 crore in the same period of the previous year. While gross sales fell 20% in the quarter to ₹17,556 crore, the company took a ₹725-crore impairment for the iron ore mining operations at Chile and ₹80 crore towards retirement of certain fixed assets in India in its consolidated results.
Revenue from operations decreased by 20% YoY to ₹17,887 crores for the quarter. Operating EBITDA reported was ₹2,975 crores with EBITDA margin of 16.6%.
Consolidated net profit for the full year FY20 fell 48% to ₹3919 crore, from ₹7524 crore in FY19. The company achieved 97.3% of its crude steel production guidance of 16.50 mt per annum (mtpa) for FY2020. Saleable steel sales volumes for the year stood at 15.08 million tonnes, lower by 4% year-on-year.
The company said that given extraordinary circumstances of the pandemic and the shortage in availability of labour, the expansion of crude steel capacity at Dolvi works from 5 mtpa to 10 mtpa along with the captive power plant and coke oven phase 2 is likely to get delayed into the second half of FY21.
The board of directors passed resolutions to raise upto $2 billion from the international markets and ₹7,000 crore through domestic non-convertible debentures.