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JSW Steel has reported a net profit of ₹656 crore in the quarter ended June 30 against a net loss of ₹382 crore a year earlier.
Sales improved 29 per cent to ₹13,067 crore compared with ₹10,141 crore in the year-ago period, while earnings per share stood at ₹26.82 against ₹16.13.
Seshagiri Rao, Joint Managing Director, said the focus on value-added products and softening of coking coal prices helped the company improve profitability.
The contribution of value-added products in overall sales increased to 29 per cent in the June quarter from 25 per cent a year ago.
The company has set a target to enhance this contribution to 33 per cent by the end of this fiscal.
Strengthening the value-added product output, JSW Steel commissioned a 0.40-million-tonne (mt) continuous galvanising line and a 0.95 mt continuous annealing line at Vijayanagar, Karnataka, and a 1-mt coke oven plant at Dolvi in Maharashtra during the June quarter.
The company sold 2.88 mt of steel in the quarter with exports accounting for 55 per cent. Earnings before interest, tax, depreciation and amortisation was the highest ever at ₹2,612 crore.
“The coking coal prices have declined by $15 a tonne and are expected to fall by $15 a tonne in the September quarter. However, iron ore prices are rising steadily due to acute shortage,” Rao said.
Iron ore import The Vijayanagar plant, which has a production capacity of 10 mt, operated at 85 per cent due to iron ore shortage.
The company plans to import 6 mt of iron ore this fiscal.
“Importing of iron ore has been a challenging task as there are very few ports in India that can handle cape size vessels and facility to store iron ore. This apart, railways do not give priority to transport iron ore,” said Rao. On the ₹30 crore paid to the promoter’s company for brand building, he said the entire amount will be spent on promotional activities and there is enough control on spending.
All the group companies will make a similar contribution of 0.25 per cent to JSW Investments, a promoter group company.
The net debt of the company stands at ₹35,870 crore, of which foreign currency loan accounts for 40 per cent.
JSW Steel intends to increase the portion of foreign currency loan to 50 per cent by raising ₹3,500 crore through external commercial borrowings.
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