The steel major's consolidated net loss stood at Rs 582 crore in Q1 June 2020 compared with net profit of Rs 1,008 crore in Q1 June 2019.
Consolidated net sales slumped 41% to Rs 11,454 crore in Q1 June 2020 over Rs 19,407 crore in Q1 June 2019. Pre-tax loss stood at Rs 643 crore in Q1 June 2020 compared with pre-tax profit of Rs 1,770 crore in Q1 June 2019. Current tax rebate was at Rs 33 crore in Q1 June 2020 as against a tax expense of Rs 483 crore paid in Q1 June 2019. The result was announced post trading hours on Friday, 24 July 2020.
Since the commencement of lockdown from March 2020, JSW Steel has faced significant supply chain constraints and shortage of worforce. The company adhered to the operating protocols to comply with all the safety and social distancing requirements, secured necessary approvals from local authorities to resume operations towards the end of April 2020. Since then, operations have gradually ramped up, and for the months of May and June, the facilities operated at an average capacity utilisation of 80%.
JSW Steel's saleable steel sales for the quarter stood at 2.79 million tonnes (MT). The firm enhanced exports to offset the loss of volumes in domestic market, liquidate inventory and improve cash flows. Export sales stood at 1.58 million tonnes for the quarter, a record high, with domestic sales at 1.21 million tonnes.
Consolidated operating EBITDA stood at Rs 1,341 crores with EBITDA margin at 11.4% during the quarter. The company's consolidated net gearing (Net Debt to Equity) stood at l.54x at the end of the quarter (as against 1.48x at the end of 4Q FY2020) and Net Debt to EBITDA stood at 5.74x (as against 4.50x at the end of 4Q FY2020).
During the quarter, the company spent about Rs 2,369 crore for capex, against a total planned capex spend of Rs 9,000 crore for FY2021.
In its outlook, JSW Steel stated that economic activities are picking up across the board, reflecting improved business sentiment on the back of easing lockdown restrictions. Large pockets of activity/industries are heading towards gradual stabilisation. However, localised lockdown driven by resurgence of COVID-19 cases remains a key risk to sustain the pace of recovery.
In rural Indian economy is performing well, aided by limited pandemic impact as compared to urban areas, good monsoons, and a large part of stimulus measures directly focussed on increasing rural income and consumption. Meanwhile, workforce remobilisation and constrained liquidity remain key challenges for the core sectors of the economy, even though there is signs of returning labour force driven by expectation of a higher income.
Overall, targeted access to credit and liquidity,favourable policies and measures to support global supply chain realignments are likely to aid steady domestic economic recovery, primarily in the second half of FY2021. Indian crude steel production declined 41.6% Y-o-Y (year-on-year) during the quarter and finished steel consumption fell 55% Y-o-Y due to nationwide lockdown in the month of April 2020 and subsequent gradual relaxations in May 2020. While domestic demand remained subdued during Q1 FY2021, India emerged as major steel exporter with export volumes of 5.54 million tonnes during the quarter, implying a 3x increase over the corresponding period last year.
The board on Friday approved the raising long-term funds through the issuance of secured/unsecured, redeemable, non-convertible debentures (NCDs) up to Rs 10,000 crore by the way of private placement. The fund will be utlised to replace short maturity loans, meet long term working capital requirements, capital expenditure/reimbursement of capex already incurred and/ or for general corporate purposes.
Shares of JSW Steel slipped 0.27% to Rs 204.35. JSW Steel is a flagship company of the JSW Group, an integrated steel manufacturer in India with an installed steel-making capacity of 18 million tonnes per annum (MTPA).
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