MUMBAI JSW Steel Ltd said on Friday that its output and sales for the fiscal year to March will fall short of its target due to a delay in capacity addition, as it reported a $136 million quarterly loss.
Steelmakers globally have been hit by weak prices and dumping of cheap steel by China. A sharp increase in imports from Japan and South Korea, who have free trade agreements with India, have also weighed on Indian steel companies.
JSW Steel, however, does not expect prices to fall any further in its fiscal fourth quarter to March, commercial director Jayant Acharya, said, adding that he expects firm local demand.
The company, which has the biggest steelmaking capacity in India, is adding 4 million tonnes to take its total installed capacity to 18 million tonnes. That expansion, which was scheduled to be commissioned in December, will now be completed by March, Joint Managing Director Seshagiri Rao said.
"So, we may be short of around 5 to 6 percent in our full year production and sales guidance," Rao told a news conference on Friday after the company announced its results for its fiscal third quarter to December.
JSW had targeted production of 13.4 million tonnes and sales of 12.9 million tonnes for the fiscal year.
For the three months to December, it reported a consolidated net loss of 9.23 billion rupees ($136 million), hit by a one-off charge and weak domestic demand. It had posted a net profit of 3.29 billion rupees a year earlier.
The latest results included a one-off charge of 21.22 billion rupees on impairment of its overseas assets.
Consolidated net sales for the December quarter fell by about a third from a year earlier to 86.21 billion rupees.
JSW Steel, which owns iron ore mines in Chile and coking coal mines in the United States, has halted production at the mines due to lower prices and weak demand.
The mines will remain shut until prices of the commodities revive, Rao said.
($1 = 67.8600 Indian rupees)
(Writing by Devidutta Tripathy; Editing by Susan Fenton)
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Published Date: Jan 30, 2016 12:15 am | Updated Date: Jan 30, 2016 12:15 am