JSW Steel posts Rs 656.5 crore profit in Q1

Leading steel maker JSW Steel Ltd today reported consolidated net profit of Rs 656.49 crore on higher contribution from value-added products and lower coking coal price during quarter ended June 2014.
The company had reported net loss of Rs 381.82 crore in the same period last year.
Total income from operations grew by 29 per cent on yearly basis to Rs 13,254 crore from Rs 10,270.6 crore mainly led by strong volumes, healthy realisation and higher exports.
During the quarter ended June 2014, the company's crude steel production grew by 8 per cent Y-o-Y to 3.1 million tonnes and saleable steel sales jumped 13 per cent to 2.88 million tonnes during the quarter on standalone basis.

"Despite the problems of sourcing iron ore, the company managed to improve its bottomline on the back of lower coking coal prices and focus on value added products," JSW Steel Joint Managing Director and Group CFO Seshagiri Rao told reporters here.
The company presently has a capacity of 14.3 million tonnes across the two integrated steel plants in Maharashtra and Karnataka.

The implementation of ongoing projects like modernisation of BF-1 and electrical steel complex at Vijayanagar and capacity expansion project from 3.3 MTPA to 5 MTPA at Dolvi are progressing satisfactorily, and is likely to complete as per schedule.
The company hopes to add 4 MT to increase its capacity to 18.6 MT by FY'16, Rao said.

"Despite India being endowed with high quality iron ore resources, we have resorted to importing iron ore. With the clamp down by the Supreme Court in Orissa, iron ore availability domestically remains constrained, causing pressure on pricing and margins," he said.
The company is presently importing iron ore from South Africa and Canada. Nearly 51 mines in C category in Karnataka are expected to be auctioned in near future and the company has applied for 15 mines, Rao said, adding that it will help the company in sourcing 50-60 per cent of its captive requirements of iron ore.
JSW Steel had net debt of Rs 35,870 crore at the end of June 2014 and a debt to equity ratio of 1.59. The company is looking at raising Rs 3,500 crore through bonds and ECBs, but has no immediate plans to raise funds through equity, Rao said.

Commenting on outlook, he said, the domestic steel prices are expected to remain flat in the near future, where as demand for steel is likely to pick up in the second half of this year.
"The economy appears to be recovering with stable rupee, moderating Inflation, external demand, and improving industrial activities. Improving business sentiment, new government's housing and push for infrastructure investment augurs well for steel consumption," he said.