Posted on 26 Oct 2020
JSW Steel, India’s second largest private steel manufacturer, swung back to profit in the July-September quarter as domestic demand recovered and the pandemic-induced lockdown curbs were eased across the country.
The company reported a net profit of ₹1,595 crore for Q2, down 37% year-on-year but far better than the June quarter performance when it had reported a net loss of ₹582 crore.
It said capacity utilisation returned to pre-covid levels at 86% in the second quarter, from 66% in April-June and that as domestic demand recovered, the company’s exports eased to 28% from 57% in Q1FY21.
Between July and September, crude steel production rose 30% sequentially to 3.85 million tonnes. Production of flat steel rose 21% year-on-year to 3.12 mt during July-September while that of long steel fell 9% to 0.77 mt.
With crude steel production and saleable steel volumes for first half of FY2021 at 6.81 mt and 6.92 mt, JSW said it is on course to meet its annual guidance of 15 mt saleable steel.
JSW’s revenue from operations stood at ₹19,264 crore, while operating earnings before interest, tax, depreciation and amortisation (Ebitda) was ₹4,414 crore. Net debt fell by ₹1,635 crore and net gearing ratio stood at 1.43 at the end of the quarter, against 1.52 at the end of Q1.
Its overseas subsidiaries continue to be a drag on the company’s profitability. The US Plate and Pipe Mill ran at 22% capacity and reported Ebitda of $17.24 million (because of a one-off credit) while JSW Steel Ohio reported an Ebitda loss of $10.52 million. JSW Steel Italy (Aferpi) reported an Ebitda loss of 12.59 million euros.
“In India, a broad-based economic recovery is underway with business sentiments improving substantially over the recent months,” the company said in a press release. “The manufacturing activities reflect strong rebound, and the service sector is gradually stabilizing. The recovery in automotive sector, notably in two wheelers and passenger vehicles, is better than anticipated. The rural economy is resilient, aided by good monsoon, stimulus measures focused on increasing rural income and consumption. Further structural reforms like farm bill augur well for the rural sector.”
Source:Live Mint
