Driven by higher steel prices and rising demand, JSW Steel Ltd on Thursday said its profit during the second quarter ended September 2018 increased by 150 per cent to ₹2,087 crore from ₹836 crore during the corresponding quarter last year.
The consolidated revenue from operations increased by 25 per cent to ₹21,552 crore for the quarter.
JSW Steel Joint Managing Director and Group Chief Financial Officer Seshagiri Rao said crude steel production during the quarter increased by 6 per cent YoY to 4.18 million tonnes aided by higher capacity utilisation at Vijayanagar and Salem works.
Standalone saleable steel sales volume for the quarter was up 1 per cent YoY to 3.96 million tonnes. Consolidated saleable steel sales stood at 3.91 million tonnes during the quarter, driven by 14 per cent increase in offtake from OEM’s and favourable international markets. “The company strategically focused on increasing domestic sales volume, which witnessed a growth of 11 per cent YoY in the quarter. Sales of value added and special products (VASP) accounted for 55 per cent of total sales volumes and sales to automotive customers increased by 36 per cent YoY,” he said.
On the outlook for FY 19, the company said that the World Steel Association (WSA) has upgrade its global finished steel demand growth estimates for CY 2018 to 2.1 per cent from 1.8 per cent, primarily due to higher real demand growth from China (revised up from zero per cent to 2 per cent). Even world ex-China demand is estimated to grow by 2.1 per cent in 2018. However, increasing trade tensions, volatile currency movements and uneven growth are increasing uncertainty for sustainability of global steel demand growth.
“In India, a strong momentum in government spending on infrastructure is driving the increase in Gross Fixed Capital (GFC) formation. Consumer demand continues to drive vehicle production and consumer durable volumes. Rural demand momentum continues to remain firm underpinned by higher disposal income and higher minimum selling price for the agriculture products,” JSW Steel said.
India’s Q2 FY2019 crude steel production grew by 4.2 per cent YoY, while the apparent finished steel consumption grew by 6.8 per cent. WSA has also increased India’s steel demand growth estimates for CY 2018 to 7.5 per cent from 5.5 per cent on strong infrastructure spend and growth in consumer demand for automotive and white goods.