Sajjan Jindal-led JSW Steel has reported 56.90 per cent year-on-year decline in consolidated net profit at Rs 1,008 crore for the first quarter ended June 30, 2019, impacted by inventory pileup, lower steel prices and poor demand.
"The steelmaker had posted consolidated net profit of Rs 2,339 crore during the same quarter last year," JSW Steel said in a filing to the Bombay Stock Exchange.
Consolidated revenue declined by 3.5 per cent to Rs 19,812 crore in Q1FY20, from Rs 20,519 crore in year-ago period, the Mumbai-headquartered company said.
JSW Steel's consolidated operating profit or EBITDA (earnings before interest, tax, depreciation and amortization) fell by 27 per cent to Rs 3,716 crore as against Rs 5,105 in the corresponding quarter last fiscal. The operating margin stood at 21.3 per cent in April-June period of 2019-20.
The company's other income jumped nearly three-folds to Rs 141 crore, in comparison to Rs 58 crore in the year ago period, helped by higher treasury income driven by higher cash balance.
The financial cost in Q1FY20 increased to Rs 1,042 crore, as against Rs 887 crore in the corresponding quarter last fiscal, the JSW Group company said.
During the quarter under review, total expenses rose to Rs 18,164 crore from Rs 17,206 crore in the same quarter of the last year.
The company said that crude steel production increased 3 per cent YoY to 4.24 million tonnes. As a result, the company's steel inventory increased by 300,000 tonnes to 1.2 million tonnes. The inventory includes both finished goods as well as goods that are work-in-progress.
"The subdued steel demand led to lower sales volumes and accumulation of inventory across the industry," the company said.
In a separate filing, the company said it has approved raising long-term funds by issuing non-convertible debentures (NCDs) of up to Rs 10,000 crore. The funds would be raised through private placement and/or public issuance in one or more tranches to replace short-term loans, meet JSW Steel's working capital requirements, capital expenditure and general corporate purposes, it added.
Meanwhile, JSW Steel shares closed 0.36 per cent higher at Rs 249.65 apiece on the BSE on Friday.
Edited by Chitranjan Kumar