JSW Steel swings back to profit in September quarter

JSW Steel today reported a consolidated net profit of Rs 749 crore in July-September quarter on the back of higher margins and hedging initiatives that helped it avoid forex loss.
The company had reported Rs 116 crore net loss in the July-September quarter of the previous fiscal.
"While the higher operating margin helped improve topline of the company, bottomline has improved because of the zero exchange loss which was made possible through hedging," said company's Jt. Managing Director and Group CFO Seshagiri Rao in a conference call after the results.
Operating EBITDA of the company, on a consolidated basis, improved by 19 per cent during reporting quarter to Rs 2,791 per tonne. Sales volume remained largely flat at 3.1 million tonnes, but gross turnover was higher at Rs 14,859 crore.

This was possible because of higher sales of value-added steel products by the company which stood at 33 per cent of the total kitty. Exports were also up at 7.9 lakh tonnes, which accounts for nearly 62 per cent of total exports from India during the period.
Rao, however, said domestic sales were more remunerative for the company during the period than sales overseas. JSW markets its products in over 100 countries.

Total expenses of the company went up to Rs 11,955 crore from Rs 11,438 crore a year earlier. Finance costs went up to Rs 855 crore from Rs 756 crore. However, during the reporting quarter, there were no exchange loss compared to Rs 851 crore loss in the same period last fiscal.

JSW Steel has imported around 1.7 million tonnes iron ore so far in current fiscal and might end up importing around 10 million tonnes. The company would bid for Category C mines in Karnataka.
On whether JSW Steel would bid for cancelled coal mines if these were put up for auction, he said: "Definitely. We will participate in the auction."
Rao said company's Dolvi plant expansion in Maharashtra from 3.3 mtpa now to 5 mtpa would be completed before the deadline of September, 2015. However, he said that though the company was "committed to the West Bengal project", but raw material remains an "issue".

Shares of JSW Steel closed 2.82 per cent higher at Rs 1,175.65 apiece on BSE.