JSW Steel logs ₹582-cr loss in Q1 due to weak demand

Our Bureau Mumbai | Updated on July 24, 2020 Published on July 24, 2020

JSW Steel had scaled down and suspended operations since March to contain spread of Covid   -  Getty Images/iStockphoto

JSW Steel has reported a loss of ₹582 crore in the June quarter against profit of ₹1,008 crore logged in the same period last year, due to lower production and realisation.

Revenue was down 41 per cent at ₹11,782 crore (₹19,812 crore). Crude steel production during the quarter dipped 30 per cent to 2.96 million tonnes (4.24 mt) while sales dropped 25 per cent to 2.80 mt (3.75 mt).

The company had scaled down and suspended operations since March to contain spread of Covid. The production was restarted in April and ramped up gradually to achieve 80 per cent capacity utilisation in June.

The June quarter was marked by formidable challenges of disrupted supply chains, unparalleled drop in demand and activity levels in the domestic markets, uncertainty in seamless inbound and outbound logistics movement and liquidity constraints, said JSW Steel in a statement.

The company had improved efficiencies by leveraging on technology, reducing fixed cost base, optimising procurement costs, conserving liquidity and finding new markets and customers to remain competitive, it added.

Of the overall capex plan of ₹9,000 crore, the company had spent ₹2,369 crore during the June quarter.

Project execution at all locations is ramping up slowly as the workforce availability is gradually improving. Doubling crude steel capacity at Dolvi works to 10 mtpa and other allied infrastructure is expected to be completed by next March. The 8 mtpa pellet plant and the wire rod mill at Vijayanagar will be commissioned in September quarter.

The company has started mining operations at four iron ore mines in Odisha from July and despatches of iron ore have recently started.

JSW Steel expects workforce remobilisation and constrained liquidity remain key challenges for the core sectors of the economy, even steel demand is expected to revive slowly.

During the quarter, JSW Steel Coated Products registered revenue of ₹2,049 crore and net loss of ₹31 crore while all the company’s three subsidiaries in the US and Europe reported EBITDA loss.

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Published on July 24, 2020
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