Mumbai: Indian steel company, JSW Steel announced its Q2 results today, showcasing decline in net profit by 71.4 per cent at Rs. 127.12 crore as compared to Rs. 445.44 crore in Q2 FY10-11, much more than street expectations. The stock market did not react kindly to the results as the company’s share prices declined to Rs. 569.29 before ending at Rs. 580.45, down by 0.37 per cent.
Net sales rose to Rs. 7,625.06 crore from Rs. 5,712.84 in the corresponding quarter of FY11, reflecting a growth of 33.4 per cent on year on year basis (YoY) and a quarter on quarter (QoQ) growth of 8 per cent. Turnover stood at Rs. 8,242.55 crore.
Iron ore shortage has led to lower EBIDTA margin of 17.4 per cent while EBIDTA for the quarter was Rs. 1,332.95 crore, up by 15% over the corresponding quarter of the previous year.
During the current quarter, the Company achieved production of Crude Steel of 1.738 million tonnes, up 11 per cent and saleable steel of 1.882 million tonnes, up 19 per cent. Production was expected to be scaled down to only 30 per cent of capacity. However, the company reported that it lost 4.5 lakh tonnes of output last quarter on iron ore shortage. It also had to purchase 1.9 million tonnes of iron ore in the Karnataka auction.
While, the increasingly high cost of production by Rs. 1,500 per tonne, put pressure on this quarter results, it expects coking coal and iron ore scrap price to moderate, the company said. It also reported a forex loss of Rs. 512.98 crore due to adverse movement in rupee dollar parity.
The steel giant has cut its forecasts for FY12 volume of production guidance and sales guidance by 14 per cent and 13 per cent respectively.