JSW Steel Q4 profit up 12%
Consolidated operating earnings before interest, taxes, depreciation and amortization at ₹7,939 crore improved significantly over ₹4,547 sequentially and the margin of 16.9% in Q4 marked an improvement over 11.6%
PremiumNew Delhi: JSW Steel Ltd on Friday reported a good fourth quarter, riding on rising steel realisations and production, and declining energy costs.
Consolidated net profit at ₹3,741 crore during Q4—after incorporating the financials of subsidiaries, joint ventures and associates—improved significantly from ₹474 crore in the previous quarter and rose nearly 12% from the ₹3,343 crore a year ago. Net profit beat Bloomberg consensus estimates of ₹2068.5 crore.
On a year-on-year basis, rising steel sales volumes and improved performance of subsidiaries helped, though steel prices still remained weaker than the same quarter last year. The year-ago quarter had seen a sharp rise in steel prices post the start of the Russia-Ukraine war. Consolidated operating earnings before interest, taxes, depreciation and amortization at ₹7,939 crore improved significantly over ₹4,547 sequentially and the margin of 16.9% in Q4 marked an improvement over 11.6%. However, the operating Ebitda was still lower than ₹9,184 crore a year ago on the back of lower steel prices.
Crude steel production at the consolidated level, at 6.58 million tonnes (MT), was up 13% on year and 7% sequentially, which the company attributed to the ramp-up of Dolvi Phase-II and Bhushan Power & Steel Ltd (BPSL) expansions.
Steel sales for the quarter stood at 6.53 MT, higher 16% sequentially. These were also driven by higher exports post the removal of export duty during Q3. On a y-o-y basis sales volumes were up 9% which the company attributed to higher domestic sales.
Revenue from operations at ₹46,962 crore was up 20% sequentially though it came flat on a y-o-y basis.
Revenue from operations during FY23 at ₹165,960 crore was up 13% y-o-y. Net profit at ₹4,139 crore for FY23 however was sharply lower than the ₹20,938 crore in FY22. The decline is attributed to the fall in steel prices witnessed throughout FY23 and a sharp rise in raw material costs.
JSW steel said that while the global economic scenario remains challenging, India is seeing healthy steel demand growth, which will support jts performance in the coming quarters.
Meanwhile, deputy MD Jayant Acharya was appointed joint MD and CEO with effect from Friday after Seshagiri Rao, joint MD and Group CFO, completed his term.
The company expansions are progressing well and keep volume outlook strong.
The ongoing ramp-up of the 5mtpa Dolvi Phase-II expansion achieved capacity utilization of 91% in Q4 versus 85% in the previous quarter. The ramp-up of BPSL operations following expansion of capacity from 2.75mtpa to 3.5mtpa also meant capacity utilisation of 89% in Q4 versus 85% in Q3 FY23.
Post completion of Phase-I expansion from 2.75mtpa to 3.5 mtpa at BPSL during FY23, the Phase-II expansion from 3.5mtpa to 5mtpa remains on track for completion in FY24, said the company.
The 5mtpa brownfield expansion at Vijayanagar is progressing well, with construction activities and equipment erection for all packages underway. The project is expected to be completed by the end of FY24.
The Company’s domestic capex spend was at ₹3,507 crores during Q4 FY23, and ₹14,214 crores for FY23, against the (revised) planned of ₹15,000 crores for FY23. The Company expects to spend an amount of ₹18,800 crores for FY24, primarily for completing the 5mtpa brownfield expansion at Vijayanagar and BPSL Phase-II expansion to 5mtpa, downstream facilities and sustenance capex.
"Exciting news! Mint is now on WhatsApp Channels 🚀 Subscribe today by clicking the link and stay updated with the latest financial insights!" Click here!
