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Informist, Friday, Oct. 25, 2024

 

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--JSW Steel Jul-Sept consol net profit INR 4.39 bln
--Analysts saw JSW Steel Jul-Sept consol net profit INR 4.86 bln
--JSW Steel Jul-Sept consol net profit INR 4.39 bln vs INR 27.60 bln
--JSW Steel Jul-Sept consol revenue INR 396.84 bln vs INR 445.84 bln yr ago
--JSW Steel: One-time cost of INR 3.42 bln in Jul-Sept
--JSW Steel Apr-Sept consol net profit INR 12.84 bln vs INR 50.98 bln yr ago
--JSW Steel Apr-Sept consol revenue INR 826.27 bln vs INR 867.97 bln yr ago
--JSW Steel cuts FY25 capex to INR 160 bln-INR 170 bln vs INR 200 bln prev
--JSW Steel: Cut capex due to rescheduling of BF-3 expansion to next year
--JSW Steel: Cut capex due to slurry pipeline project's transfer to JSW Infra
--JSW Steel consol spending on capex INR 33.84 bln in Jul-Sept
--JSW Steel Jul-Sept consol operating EBITDA INR 54.37 bln, down 1% on qtr
--JSW Steel Jul-Sept steel sales 6.13 mln tn, down 3% on year
--JSW Steel Jul-Sept domestic sales 5.57 mln tn, up 1% on year
--JSW Steel: Sales to institutional segment up 12% on year in Jul-Sept
--JSW Steel: Sales to retail segment dn 14% on year in Jul-Sept
--JSW Steel Jul-Sept consol operating EBITDA margin 13.70% vs 17.69% yr ago

--JSW Steel consol net debt INR 851 bln on Sep 30, up INR 49 bln from Jun 30

 

By Rajesh Gajra and Ayush Kumar

 

MUMBAI – A 3% sales volume fall on year in sales and lower domestic realisations due to competition from cheap Chinese steel imports led to a possibly unprecedented fall in revenue for JSW Steel Ltd. in the quarter ended September. Input costs increased, hitting the operating profit and bottom line of the largest steelmaker in the country. The earnings also missed analyst estimates.

 

JSW Steel reported a consolidated net profit of INR 4.39 billion in Jul-Sept, down 84% on year. The net profit was sharply lower than the Street estimate of INR 4.86 billion. It was the worst net profit growth in seven quarters. The consolidated revenue from operations fell nearly 11% from a year ago to 396.84 billion. The revenue also missed the Street estimate of INR 419.28 billion. The fall in revenue is the worst in at least 17 quarters. 

 

The consolidated steel sales in Jul-Sept declined 3% on year to 6.13 million tonnes, while domestic sales were up 1% on year to 5.57 million tonnes. The company said retail segment sales fell 14% on year due to elevated imports, implying competition from steel imports from China.

 

The company exported 0.39 million tonnes of steel, down 43% on year. The share of sales from steel exports in the company's Indian operations fell to 7% in Jul-Sept from 10% a quarter ago.

 

The company's earnings before income, tax, depreciation and amortisation declined 1% sequentially to INR 54.37 billion in Jul-Sept as a sharp fall in steel realisation was offset by lower costs. The EBITDA was INR 78.86 billion a year ago.

The company reported an EBITDA margin of 13.7% for the September quarter, down from 17.7% a year ago.

The EBITDA and the margin were also affected as the cost of raw materials consumed, which make up for the bulk of operating expenses, went up 2.2% on year to INR 219.65 billion in Jul-Sept. The other expenses rose 11.4% on year to INR 62.33 billion.

 

Apart from the EBITDA fall, JSW Steel's bottom line was hit by a 35% on-year fall in other income to INR 1.53 billion and a 12.3% on year rise in depreciation and amortisation costs to INR 22.67 billion during the quarter.

 

The net profit was also hit by one-time exceptional expenses of INR 3.42 billion for provisions pertaining to underlying assets, inventory and site restoration liabilities during the quarter. The company had reported one-time gains of INR 5.89 billion a year ago.

 

Apart from domestic factors, the EBITDA was hit due to an operating loss of $11.10 million from the company's overall US operations compared with a loss of $3.43 million a year ago. The Ohio unit in the US recorded an operating loss of $16.14 million in the September quarter, compared with a loss of $29.39 million a year ago.

 

In the domestic market, due to pressure from low-priced steel imports from China, the net realisation fell 7% on year and 5% sequentially. The company said that its sales to the institutional segment rose 12% on year in Jul-Sept. The share of domestic value-added products sales went down to 60% from 62%. The company said that it expects steel demand in India to grow around 10-11% in the current financial year ending March.

 

JSW Steel said it is targeting a consolidated capital expenditure of INR 160-170 billion in FY25, as against the earlier estimate of INR 200 billion "due to the transfer of the slurry pipeline project to JSW Infrastructure and rescheduling the BF-3 expansion to next year." The consolidated capex incurred was INR 33.84 bln in Jul-Sept and INR 78.50 billion in Apr-Sept.

 

On Friday, shares of JSW Steel ended 1.5% lower at INR 943.85 on the National Stock Exchange.  End

 

Edited by Saji George Titus

 

 

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