Friday, January 29, 2016

JSW Steel posts Rs 923 cr loss on impairment charges

JSW Steel reported consolidated net loss of Rs 923 crore in the December quarter against net profit of Rs 329 crore in the same period last year largely due to impairment charge of Rs 2,122 crore on its overseas investments and lower production in India.

JSW has iron ore mining in Chile, besides a Plate and Pipe Mill and coking coal mines in the US.

The iron ore mine in Chile is shut since April last year and incurred Ebitda loss of $0.32 million in December quarter while in US the Ebitda loss was at $4.9 million due to dumping of steel by China.

Consolidated net sales were down at Rs 8,621 crore (Rs 12,927 crore) on lower realisations and production.

The company had shut down three of its blast furnaces to upgrade and enhance their capacity. These furnaces, which were to be commissioned in December, will now start production in February, thus delaying the company's plan to increase overall capacity to 18 million tonne by three months.

Apart from production loss, the company also incurred a fixed cost of Rs 300 crore due to shut down of three furnaces during rhe quarter.

Crude steel production was down 15 per cent at 2.70 million tonnes (mt) while saleable steel output was down 16 per cent at 2.55 mt.

Given the challenging business environment, the company will review its planned investment of Rs 4,000 crore for next fiscal in March.

Net debt was 39,480 crore and loan repayment of Rs 3,900 crore is expected next fiscal.

Hit by unrelented imports, the company's Ebitda per tonne hit the lowest level of Rs 3,443 since 2008. It was Rs 4,900 a tonne in the same period last year.

Speaking to media, Seshagiri Rao MVS, Joint Managing Director, JSW Steel said saddled with excess production capacity China is continuing to dump steel even as it incurs loss of $102 on every tonne of steel exported.

Armed with free trade agreement and their sharp currency depreciation against dollar, Japan and Korea along with China accounted for 70 per cent of 9 million tonne of steel imported into India. At this rate, Rao said imports will touch 12 million tonnes if corrective measures are not taken.

On a standalone basis, the company registered net loss of Rs 4,142 crore in December quarter against net profit of Rs 415 crore in the same period last year. This provisioning on standalone books was higher at Rs 5,597 crore as it also includes diminution in value of investments in subsidiaries, besides guarantees and loan extended to them.

No comments:

Post a Comment