The Hindu Business Line : JSW Steel net rises 48%; input costs hit realisation

Tornagallu, (Bellary), Oct. 25 JSW Steel reported a 48 per cent increase in its net profit at Rs 511.23 crore for the quarter ended September 2007 even while its price realisation dipped by one per cent due to higher input costs as compared to the corresponding period last year.

Though the sales volume increased by 12 per cent during the period, increase in the price of ore by almost 100 per cent and 25 per cent increase in the price of coke affected performance.

Net income, which included a Rs 111 crore from the sale of carbon emission reduction, was only 19 per cent higher at Rs 2,618.77 compared to Rs 2,196.63 crore during the second quarter FY 2006-07.

Higher costs

Announcing the results for the second quarter , Mr Sajjan Jindal, Vice-Chairman and Managing Director, said higher input costs, with ore price alone spiralling to $185 per tonne resulted in lower price realisation.

JSW buys ore to the extent of 50 per cent from the market thus becoming vulnerable to price escalation. This affects the company’s efforts to achieve higher cost control, Mr Jindal said at a press conference here Thursday.

However, he added, with completion of some measures in the hot metal pre-treatment and coal drying plant during the quarter, JSW could neutralise the impact of escalation in input costs.

Half-year numbers

During the fist six months of the current fiscal JSW’s income rose 30 per cent at Rs 4,945.97 crore against Rs 3,802.98 crore for the corresponding period in FY 2006-07, while its net profit jumped to Rs 939.01 crore (Rs 516.6 crore).