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JSW Steel reported a net loss of ₹915 crore in the September quarter against a net profit of ₹7,179 crore logged in the same period last year, largely due to sale of high cost inventory at a lower price.
Revenue from sales was up at ₹41,122 crore (₹31,909 crore). Expenses increased 79 per cent to ₹43,354 crore (₹24,261 crore) on higher power cost at ₹4,602 crore (₹2,361 crore).
During the quarter, the combined crude steel production of JSW Steel was 5.68 million tonnes, sequentially lower by 3 per cent, attributable mainly to extended maintenance shutdowns and subdued market conditions in US. The 5 mtpa Dolvi expansion continued to ramp up and achieved average capacity utilisation of 80 per cent against 60 per cent in the June quarter.
The company’s performance was significantly impacted by a sharp fall in steel prices, while benefit of lower raw material prices will flow through with a lag.
Though inflation has been above the RBI’s threshold levels, slowing global growth and macro imbalances are a significant headwind. The domestic steel industry witnessed demand growth with consumption at 27.93 mt in September, up by 13 per cent supported by a strong automotive sector and demand from the infrastructure sector. However, the imposition of export duty on finished steel products in May had made exports unattractive from India.
JSW Steel has made a provision of ₹591 crore towards net realisable value provisions and inventory losses, mark-to-market unrealised loss on outstanding foreign currency loans and payment of export duty on exports.
JSW Steel Coated Products revenue from operations was at ₹6,723 crore, and reported operating EBITDA loss of ₹79 crore. Margins were impacted by lower realisation and higher zinc price. The subsidiary reported a loss after tax of ₹260 crore for the quarter.
Bhushan Power & Steel reported revenue and EBITDA loss of ₹4,805 crore and ₹183 crore, respectively. BPSL reported a loss of ₹340 crore due to non-availability of iron ore and disruptions due to heavy rainfall in Odisha.
JSW Steel USA Ohio Inc reported an EBITDA loss of $40 million for the quarter, part of which is attributable to NRV losses while the Plate and Pipe Mill registered operating EBITDA of $24.73 million.
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