Jindal Steel posts Q3 loss, hit by coal blocks levy

Jindal Steel and Power Ltd (JSPL) reported a net loss in its fiscal third quarter, hurt by a charge related to the levy it paid the government for coal it dug out from mines that were cancelled by a court order in September.

The company, which was the worst hit by an order by the Supreme Court last year that cancelled more than 200 coal block licences, said late on Tuesday that it had cut over 5% of its 15,000-strong workforce during the October-December quarter to trim costs.

Consolidated net loss for the three months ended December 31 was 16.75 billion rupees ($271.89 million), compared with a profit of 5.59 billion in the year-ago period, JSPL said.

Earnings took a beating after it incurred exceptional charges of 18.55 billion, mainly due to a levy it deposited after nine of its coalfields were taken back by the government.

JSPL was also hurt by higher raw material costs as it had to meet a large part of its iron ore and coal requirements from auction sales or imports, the company said.

However, with project expansions complete and raw material issues expected to be resolved soon, the company said it expected to post double-digit revenue growth by the next quarter.

Jindal Steel shares, which have fallen over 40% in the past six months, were trading up 3.3% in early trade on Wednesday.