The Hindu Business Line : JSW Steel Q3 net rises 160% on higher volumes

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Mumbai Jan. 22 Higher volumes and better sales realisation helped steel maker JSW Steel Ltd post a 160 per cent jump in its net profit for the third quarter of the current fiscal at Rs 362.15 crore, against Rs 139.20 crore in the corresponding quarter of last fiscal.

Other factors such as reduction in fuel consumption in blast furnace, increased availability of captive power and lower power consumption also fuelled the growth in profits.

During the quarter, its gross turnover increased to Rs 2,512.82 crore from Rs 1,647.37 crore in the third quarter of last fiscal. While its crude steel production increased by 28 per cent to touch 0.7 million tonnes, its sales realisation for HR coils was up by 22 per cent.

Talking to press persons here on Monday, Mr Sajjan Jindal, Managing Director of the company, said JSW was on the look out for acquiring steel facilities in the UK and US. "We are looking at plants of one to two million tonne capacity segments. We intend to go about overseas acquisitions in a conservative way," he said.

The company recently set up a subsidiary, JSW Steel (UK) Ltd, to identify and speed up overseas acquisitions in steel related business and widen its presence in the international market.

Mr Jindal said the company was also looking for acquiring coal and iron ore assets, for which another subsidiary, JSW Natural Resources Ltd, had been floated. The company was looking for iron ore assets in Africa, he said, adding that it was also in talks with iron ore suppliers for long-term contracts.

The company, earlier this month, concluded a development agreement with the West Bengal Government for setting up a 10 million tonne steel plant in suitable phases at an estimated cost of Rs 35,000 crore within 12 years. The agreement includes incorporation of a special purpose joint venture company with West Bengal Industrial Development Corporation and West Bengal Mineral Development and Trading corporation.

The JSW board has approved the formation of the subsidiary company with an initial authorised and paid up equity capital of Rs 100 crore, out of which JSW's contribution would be 89 per cent. The first phase of the project, involving a capacity of three million tonnes, is expected to be completed within four years at a cost of Rs 10,000 crore.

"The core cost of the plant, assuming the power plant and oxygen plant will be implemented by other associate companies, is estimated to be Rs 6,000 crore, which would be financed by equity of Rs 2,000 crore and debt of Rs 4,000 crore," according to Mr Jindal.