JSW Steel reports net loss of Rs 382 cr in Q1

The company records gross turnover of Rs 11,155 cr, net sales of Rs 10,141 crore in first quarter

 

JSW Steel has reported a consolidated net loss of Rs 382 crore in the first quarter ended June 30, 2013 compared to a net profit of Rs 50 crore in the corresponding period last fiscal. Higher raw material costs and lack of demand for steel products impacted the company's profits during the quarter.

The company recorded gross turnover of Rs 11,155 crore and net sales of Rs 10,141 crore during the first quarter, showing an year on year growth of 3% 2% respectively.

The steel major has reported an operating EBITDA of Rs 1,879 crore after incorporating the financials of subsidiaries, joint ventures and associates. The net gearing at consolidated level was 1.38 times at the end of the quarter as against 1.11 times at the end of last financial year.

"It is commendable to show volume growth in these challenging times when Indian steel demand grew only by 0.3% during April-June 2013 and simultaneously register and improved operating margin of 18.7% sequentially from 18.3% in January-March 2013," Seshagiri Rao, joint managing director and Group CFO, JSW Steel said.

The company achieved highest ever crude steel production of 2.86 million tonnes, a growth of 34% year on year during the first quarter. Saleable steel sales went up 21% year on year to 2.55 million tonnes.

"Inspite of an acute shortage of iron ore, unreasonable prices in e-auction due to shortage of iron ore, falling global steel prices and threat of imports from countries enjoying concessional duties under FTA, the company focused on cost reduction with a change in coal blend, improved fuel efficiency, use of waste gases and productivity improvements," Rao said.

Due to the depreciation in the value of rupee against US dollar during the quarter, there was a net translation loss of Rs 853 crore on restatement of foreign currency monetary items at close of the quarter. The company has considered this loss to be exceptional in nature, the company said.

After the completion of scheme of amalgamation and arrangement between JSW Steel and JSW Ispat Steel Limited and others, the company has revised its guidance for the full year. The company is targetting total crude steel production of 12 million tonnes, a growth of 7% over the last fiscal and 9% jump in saleable steel sales at 11.55 million tonnes for the full year.

This guidance is based on the assumption that the category A and B mines in Karnataka will be opened up and sufficient quantity of good quality iron ore will be available to the company. The iron ore availability is improving, but at a slow pace, the company said.