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Provisioning for accumulated interest and forex gains of a foreign subsidiary saw steel-maker Jindal Steel and Power Ltd (JSPL) report a ₹437-crore loss for the quarter-ended September 30, 2022. The company had a standalone net profit of ₹2,711 crore in the year ago period.
The company in a statement said provisions of ₹1,664 crore for accumulated interest and forex gains on loan between JSP and its wholly owned subsidiary, JSPML (Mauratius subsidiary) have been made during the quarter. “Post these exceptional items, the reported net loss after tax was ₹473 crore,” it said.
According to Bimlendra Jha, MD, JSPL, loans were given to its Mauratius subsidiary and interest accumulated was to the tune of ₹766 crore, while another ₹898 crore was forex gain. “So if we take out the exceptional item, then there is a profit after tax of ₹935 crore,” he explained.
Revenue from operations in the quarter under review came at ₹13,107 crore, down 1 per cent YoY.
Gross revenues at ₹15,118 crore, were up 4 per cent, YoY, on the back of higher volumes but lower realisations. Benefits of lower coking coal and iron ore prices were offset by high thermal coal prices and inventory valuation losses.
Pellet production of 1.79 million tonne (mt) remained flat Y-o-Y. External sales for pellets rose to 109 KT (vs 27KT in 1QFY23) on back of domestic demand uptick.
JSPL said, strong domestic demand in Q2FY23 saw it report sales (steel) of 2.01 mt. Production was 1.82 mt during the quarter, down 6 per cent YoY. Production was lower largely due to a maintenance shutdown at the Raigarh Plant.
Export volumes dropped to 11 per cent of sales in Q2FY23 (vs 26 per cent in Q1FY23) as a consequence of export duty and weakened global demand.
The company in a statement said, Q2FY23 saw improved domestic demand of steel, but was “offset partially by falling export volumes” on the back of export duty.
India’ crude steel production remained flattish at 30 mt attributed largely to maintenance shutdowns at domestic steel producers. Steel consumption stood at 27.9 mt (up 13 per cent y-o-y).
“In terms of pricing, both longs and flats showed significant price erosion during the quarter. On the raw material front, recessionary concerns and lower demand forecast impacted commodity prices globally. However, the benefit (of the low raw material prices was not fully reflected in the reported quarter,” the company statement said.
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