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JSW Steel FY20 net profit tanks 48% to Rs 3,919 crore amid COVID-19 pandemic

BusinessToday.In     May 22, 2020

JSW Steel saw its net profit for the financial year 2019-20 almost halve on account of coronavirus pandemic and subsequent lockdown. The Sajjan Jindal-led steelmaker saw its consolidated net profit for FY20 decline 48 per cent to Rs 3,919 crore, as compared to Rs 7,524 crore.

"The fourth quarter performance of the company was marked by the emergence of COVID-19 pandemic and measures to curb its rapid spread. The Indian economy was severely impacted by the temporary closure of economic activities across the country after the announcement of the first phase of nationwide lockdown in the last week of March 2020. With a significant supply chain disruption and with a view to ensure safety of workforce across all areas of operations, the company scaled down/suspended production across all facilities around this time period," JSW Steel said in a regulatory filing.

JSW Steel saw revenue from operations decline 13 per cent to Rs 73,326 crore for the financial year ended March 31, 2020, from Rs 84,757 crore recorded at the end of financial year ended March 31, 2019. Operating EBITDA fell 37 per cent on annual basis to Rs 11,873 crore, the company said in a filing to exchanges.

For the March quarter of FY20, JSW Steel reported an 87.42 per cent decline in consolidated net profit at Rs 188 crore on the back of low income. The company had posted a consolidated net profit of Rs 1,495 crore in the corresponding quarter last year.

In its statement, JSW Steel said that it has secured required approvals to resume operations outside containment zones and has accordingly commenced operations at all facilities since the last week of April.

"While the company is making efforts to gradually ramp up capacity utilisation, the domestic demand outlook is expected to remain subdued in the near term as vast majority of customers... will take time to resume operations and increase activity levels. Consequently, the company initially intends to focus more on the export markets in order to improve utilisation, defray fixed cost over a higher base, generate cash flows and liquidate stocks," JSW Steel said in a statement.

Meanwhile, the JSW Steel board has recommended a dividend of Rs 2 per equity share on more than 241.72 crore shares equity shares of Rs 1 each for the year ended March 31, 2020, subject to approval of the upcoming Annual General Meeting. The total outflow on account of equity dividend including corporate tax on dividend including corporate tax on dividend will be Rs 483 crore, vis-a-vis Rs 1,195 crore paid for FY2019, the company said.

Under its guidance for FY21, JSW Steel has estimated crude steel production to reach 16 million tonnes, whereas saleable steel sales are expected to reach 15 million tonnes. This will amount to 89 per cent of capacity utilisation, the company said.

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