JSW Steel, the flagship firm of the Sajjan Jindal group, on Friday reported an 84.1 per cent year-on-year (Y-o-Y) decline in consolidated net profit to Rs 439 crore for the quarter ended September Q2FY25. The drop comes on the back of lower sales realisation due to cheap imports and an exceptional charge. In the year-ago period, the company’s net profit had stood at Rs 2,760 crore.
Revenue from operations on a consolidated basis in Q2FY25 stood at Rs 39,684 crore, down 11 per cent Y-o-Y from Rs 44,584 crore a year ago.
Both revenue and net profit were lower than the estimate of Rs 42,559.6 crore in revenue and Rs 485.1 crore in profit.
Sequentially, revenue was down by 7.6 per cent and net profit by 48 per cent.
Steel sales for the quarter stood at 6.13 million tonnes (mt), lower by 3 per cent Y-o-Y. However, domestic sales at 5.57 mt were the highest in the company’s history, up 1 per cent Y-o-Y, driven by the institutional segment, where sales volumes rose by 12 per cent Y-o-Y.
The company said sales to the retail segment fell by 14 per cent due to higher imports. At 0.39 million tonnes, exports fell as much as 43 per cent Y-o-Y due to an increase in Chinese exports, which adversely affected global markets, it added.
The company’s bottomline was also impacted by an exceptional charge. The company had announced the surrender of the Jajang iron ore mine in Keonjhar district, Odisha, due to economically unviable operations. It recognised a net provision of Rs 342 crore pertaining to the underlying carrying value of the assets during the quarter.
Among its Indian subsidiaries, Bhushan Power & Steel reported a loss of Rs 93 crore for the quarter. JSW Steel Coated Products (consolidated) reported a net profit of Rs 57 crore.
Lower sales realisation impacted the electric arc furnace-based steel manufacturing facility in Ohio, USA, which recorded an Ebitda loss of $16.14 million for the quarter. The group’s plate and pipe mill in Texas, USA, reported an Ebitda of $5.04 million, while operations in Italy reported an Ebitda of €6.15 million.
The company’s consolidated capital expenditure (capex) during Q2FY25 was Rs 3,384 crore, with the total spend for the first half of the current fiscal year at Rs 7,850 crore. However, consolidated capex for FY25 was revised to Rs 16,000-17,000 crore from the earlier estimate of Rs 20,000 crore, attributed to the transfer of its slurry pipeline project to JSW Infrastructure and the rescheduling of the blast furnace-3 expansion at Vijaynagar to next year.
On the outlook for the rest of FY25, the company said steel demand was expected to remain healthy in H2FY25. “The RBI’s shift in monetary policy stance to ‘neutral’ from ‘withdrawal of accommodation’ is a positive move, paving the way for potential policy easing,” it said, adding that the macroeconomic outlook remains strong.
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