JSW Steel posted an 88.3 per cent decline in net profit for December quarter of the current fiscal. The biggest steelmaker in India reported consolidated net profit of Rs 187 crore in the quarter ended December 31, 2019, as opposed to Rs 1,603 crore reported in the year-ago period.
Gross sales declined 12.1 per cent to Rs 17,416 crore in the December quarter of this fiscal, as against Rs 19,821 crore in the corresponding quarter of last fiscal. Revenue from operations dipped 11.13 per cent to Rs 18,055 crore during the quarter under review, as opposed to Rs 20,318 crore in the December quarter last fiscal.
JSW Steel reported its share of loss in joint ventures widening to Rs 27 crore during Q2 FY20, in comparison to Rs 16 crore in Q2 FY19.
The company stated that its crude steel production stood at 4.02 million tonnes, 5 per cent lower year-on-year as extended monsoon impacted operations at its Dolvi and Vijayanagar facilities.
Operating EBITDA for the quarter declined by 41 per cent on annual basis to Rs 2,667 crore with EBITDA margin at 16.9 per cent. "Even though prices of key raw materials like iron ore (aided by supplies from captive iron ore mines) and coal were lower, and there was an overall improvement in operating efficiencies, sharply lower steel pricing and realisations dragged margins. Operating EBITDA for this quarter includes a consideration of Rs 250 crore from a vendor as fees for assignment of a procurement contract pertaining to the supply of industrial gases," the company said in a regulatory filing.
JSW Steel said that commissioning of its certain capital expenditure projects is likely to be completed 3-6 months behind schedule due to extended monsoon and shortage of skilled manpower. The new facility at Dolvi is now expected to be commissioned during the first half of FY21, instead of the earlier deadline of March 2020.
"The Indian steel sector is expected to grow significantly on the back of various initiatives of the government pertaining to the domestic infrastructure and supportive monetary policies," JSW Steel said on its outlook.