JSW Steel reports consolidated loss before tax at Rs 643 cr in Q1

Since the end of April, operations have gradually been ramped up, and in the months of May and June JSW Steel facilities operated at an average capacity utilisation of 80 per cent

Sajjan Jindal-led JSW Steel reported a consolidated loss before tax of Rs 643 crore in the June 2020 quarter, in stark contrast to a profit before tax of Rs 1,770 crore in the June 2019 quarter, with the pandemic disrupting operations for close to a month.

Consolidated revenue for the period slumped 41 per cent year-on-year to Rs 11,454 crore.

“The outbreak and subsequent measures caused an abrupt disruption and slowdown in economic activity. With significant supply chain constraints, shortage of workforce, and the objective to ensure safety across all areas of operations, the company scaled down /suspended operations towards the end of March,” said the company. 

Since the end of April, operations have gradually revived, and facilities operated at an average capacity utilisation of 80 per cent in May and June, it added.

Indian crude steel production fell 41.6 per cent YoY and finished steel consumption was lower by 55 per cent YoY because of the lockdown.

While domestic demand remained subdued during Q1FY21, India emerged a major steel exporter, with shipment of 5.54 million tonnes, implying a 3x increase over the same period last year.

Consolidated net loss stood at Rs 582 crore, compared to a profit of Rs 1,008 crore in the same period last year. The bottom line received some cushioning via tax credit of Rs 61 crore, which resulted in marginal contraction of losses.

Further, consolidated earnings before interest, tax, depreciation, and amortisation (Ebitda) stood at Rs 1,341 crore, with Ebitda margin at 11.4 per cent. Consolidated net debt/equity stood at 1.54x at the end of the quarter, against 1.48x at the end of Q4FY20, while net debt/ Ebitda stood at 5.74x, against 4.50x as of Q4FY20.

Project execution at all locations is gradually rising with higher workforce availability, said JSW Steel. During the quarter, the firm spent Rs 2,369 crore on capex, as part of the total planned capex spend of Rs 9,000 crore for FY21.