 "Profit of JSW Steel slips 71% on forex loss, iron ore shortage")
**Mumbai:**Foreign exchange losses and ironore shortage hit the Sajjan Jindal-led JSW Steel hard, withthe company’s net profit declining by 71 percent to Rs 127crore for the quarter ended 30 September.
The steel-maker had recorded net profit of Rs 445.44crore during the same quarter last year.“The net profit has declined due to foreign exchangelosses and shortage of iron ore in the September quarter,” JSWSteel Joint Managing Director and Group CFO Seshadri Rao toldreporters here today.
[caption id=“attachment_114258” align=“alignleft” width=“380” caption=“The steel-maker had recorded net profit of Rs 445.44crore during the same quarter last year.AFP Photo”]
[/caption]
The Supreme Court has banned mining in Karnataka in Julyand August after allegations of illegal mining surfaced.The profit would have been much higher had the productionnot been cut due to severe iron ore shortage and also theforex translation losses of Rs 512.98 crore due to adversemovement in rupee dollar parity, Rao said.
The company sold 1.882 million tonnes steel during thesecond quarter of the fiscal, clocking around 19 percentgrowth.This yielded 33 percent rise in net sales value over thecorresponding quarter last fiscal. Net sales of the company during the reporting quarter rose to Rs 7,625.06 crore.
Production of the company was up by 11 percent at 1.738million tonnes during the reporting quarter over 1.571 milliontonnes a year ago.
The company’s production in September was down by 28 percent compared to August as it had to bring down production atits Vijaynagar facility to 30 percent in the last week of September.
“We have increased the production at our Vijaynagar plantin Karnataka around 50-60 percent of capacity from 30 percent last month,” Rao said.The company has closed two small furnaces, he said,adding, “our larger furnaces are running in Vijaynagar.”
When asked how it will cater to its needs of iron oredemand, company Director (Commercial & Marketing) JayantAcharya said, “We see this (ban on mining of iron ore inKarnataka) as a temporary situation. Once the e-auctionprocedures and new arrivals improve, we will be able to getback.”
On steel prices, Acharya said the company expected steelprices to remain flat during the December quarter.“We have increased steel prices by 3-4 percent in
October and saw flat prices during September quarter,” he said,adding, the demand is slightly better now compared toAugust-September period.
The company has reduced its guidance for both productionand sales by 14 percent and 13 percent to 7.5 million tonnesand 7.8 million tonnes, respectively.Meanwhile, the company’s Chairperson Savitri Devi Jindal
has stepped down from the Board but she would continue as"Chairperson Emeritus". Sajjan Jindal has been promoted aschairman of the company.
PTI