JSW Steel reported a sharp fall of 88 per cent in its December quarter net profit at ₹187 crore against ₹1,603 crore logged in the same period last year as steel prices plunged due to weak demand.

Sales were down 12 per cent at ₹17,416 crore (₹19,821 crore). Production in the quarter dipped 5 per cent to 4.02 million tonnes due to the extended monsoon.

The company has postponed commissioning of 5 mt fresh capacity at Dolvi in Maharashtra and other expansions at Vijaynagar in Karnataka by 3-6 months due to the monsoon impact.

Ebitda per tonne in the quarter under review almost halved to ₹6,622 against ₹12,224 as the company sold high-cost inventory during the quarter.

Seshagiri Rao, Joint Managing Director, JSW Steel, said that though steel prices have started going up since November in line with the global trend, it was not enough to match the last year's numbers.

Net debt was flat at ₹49,559 crore.

The Enforcement Directorate has pointed to the mining joint venture JSW Steel had with Bhushan Power and Steel and included it as part of the ongoing investigation against Bhushan Power’s promoters.

Reacting to this, Rao said the joint venture company was among four companies, including JSW Steel, formed as per the central government direction when the mine was allotted.

Subsequently, the mine allotment was cancelled by the government. This was duly disclosed when JSW Steel placed a bid for Bhushan Power and the resolution professional tested the company's eligibility under Section 29 before announcing JSW Steel as the highest bidder for the stressed asset, he added.

NCLAT will hear the case on January 30.

Bulk carrier purchase

To reduce transportation costs JSW Steel will buy 14 bulk carrier vessels for ₹700-800 crore. The first set of seven vessels is expected to be delivered by August.

“Till date we were engaging 45-50 small-size barges, which will be replaced by bigger carriers,” said Rao.

Expressing serious concern over the non-availability of funding for the steel sector, he said risk-averse banks have reduced loan exposure to the steel sector from a high of ₹3.26 lakh crore in 2017 to ₹2.68 lakh crore as of December-end

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