JSW Steel Q4 net profit slumps 87% to Rs 62.38 cr

Shares of JSW Steel fell today by 3.28% to settle at Rs 875.45 a piece at the BSE.


New Delhi: JSW Steel on Friday reported an 87 percent decline in consolidated net profit at Rs 62.38 crore for the quarter ended March 31, 2015 due to a fall in revenue.

The company had posted a net profit of Rs 482.83 crore in the year-ago period, it said in a BSE filing.

Net income fell by 12 percent to Rs 12,599.70 crore in the January-March period of the 2014-15 fiscal from Rs 14,342.41 crore in a year-ago.

The quarterly performance was hit due to fall in revenues from steel, power and other business segments.

During the quarter, JSW reported crude steel production as well as saleable steel sales volume of 3.06 million tonnes.

However for the year ended March 31, JSW Steel reported over three-fold jump in consolidated net profit to Rs 1,796.57 crore from Rs 451.95 crore in the 2013-14.

The company's total income grew by 3.4 percent to Rs 52,971.51 crore from Rs 51,219.62 crore in the said period.

"The company was able to partly offset the headwind of intensifying price competition from surging imports with product mix enrichment," JSW Steel said.

It said that ramping up of new downstream facilities led to the share of value-added products in overall volumes improving to 33 percent during 2014-15.

During Q4, the company said that "it entered into an asset transfer agreement with JSW Cement (JSWCL) for sale of all immovable property including, equipment and machinery, which were acquired from Heidelberg Cement India Ltd."

On outlook, JSW Steel said it expects steel production to grow by 6 per cent to 13.40 million tonnes (MT) in 2015-16 from 12.63 MT in 2014-15.

Similarly, saleable steel sales are projected to grow by 7 percent to 12.90 MT from 12.03 MT during the same period.

Noting that rising steel imports continue to be a concern, JSW said: "Indian steel industry faced headwinds of a 71 per cent year-on-year surge in finished steel imports (especially from China, Korea, Japan and Russia) in 2014-15, when apparent consumption rose only 3.1 percent y-o-y."

Meanwhile finished steel exports also decreased by 8.1 percent on yearly basis in the 2014-15 fiscal, it said, adding that restart of closed mines in the 2015-16 fiscal will improve domestic iron ore availability.

In India, overall activity levels show mixed signs, inflation remains modest and there are initial signs of pick up in capital goods and medium and heavy commercial vehicle segment, however, actual uptick in investment cycle is yet to be seen, the firm said.

"At the same time, tighter liquidity conditions, slowing rural demand due to recent unseasonal rains, leveraged corporate balance sheets and below-normal monsoon forecast are key risks," it added.

Shares of JSW Steel fell today by 3.28 percent to settle at Rs 875.45 a piece at the BSE.

JSW has decided to increase capacity of the Salem unit to 1.2 MTPA by enhancing capacity of the Blast Furnaces along with other balancing facilities.

This project will be taken up in two phases at an estimated project cost of Rs 1,000 crore and is expected to be completed by FY 2017.

Tin Plate demand in India is likely to witness a healthy growth driven by a growing market for packed foods/packaging requirements.

"Hence, the company has decided to set up a 0.20 MTPA Tin Plate Mill at Tarapur Complex (under JSW Steel Coated Products Ltd) along with an Acid Re-Generation Plant, an Effluent Treatment Plant (ETP) and a Bulk Ammonia Storage facility at an estimated cost of Rs 650 crore. The project is expected to commission in 24 to 30 months," it added.

"The total outflow on account of equity dividend including corporate tax on dividend will be Rs 320.02 crore, vis-a-vis Rs 311.08 crore paid for FY 2013-14," it said.

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