JSW Steel Ltd on Friday reported 84 per cent decline in its consolidated net profit at ₹439 crore in the second quarter, compared with ₹2,760 crore in the corresponding quarter last year.
Revenue from operations fell 11 per cent year-on-year (y-o-y) to ₹39,684 crore compared to ₹44,584 crore last year.
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Elevated chinese imports
“China’s elevated steel exports at 84 million tonnes (mt) (up 21 per cent y-o-y) between January and September has dampened global steel prices and margins. Several countries have restricted Chinese steel imports, and the steel industry is engaging with the government to ensure fair competition,” JSW Steel said in a statement.
Steel sales for the quarter stood at 6.13 mt, lower by 3 per cent y-o-y and a flattish quarter-on-quarter (q-o-q). Domestic sales at 5.57 mt were the highest in any quarter, up 1 per cent y-o-y and 5 per cent q-o-q. Sales volumes to the institutional segment increased by 12 per cent y-o-y. However, sales to retail segment fell by 14 per cent due to elevated imports.
Exports at 0.39 mt , fell by 43 per cent y-o-y and 34 per cent q-o-q due to elevated Chinese exports adversely affecting the global markets. Exports constituted 7 per cent of the sales from the Indian operations for Q2FY25 compared with 10 per cent sales in Q1FY25.
The company registered an operating EBITDA (earnings before interest, taxes, depreciation, and amortisation) of ₹5,437 crore, with an EBITDA margin of 13.7 per cent during the quarter. EBITDA reduced by 1 per cent q-o-q as a sharp fall in steel realisations was largely offset by lower costs.
On August 3, 2024, the company had announced the surrender of the Jajang Iron ore mine located in Keonjhar district of Odisha due to operations being economically unviable. Subsequently, on October 9, 2024, the Indian Bureau of Mines approved the Final Mine Closure Plan. Pursuant to this approval, the company has submitted an application for surrender of the mining block.
The company has recognised a net provision of ₹342 crore pertaining to the underlying carrying value of the assets including inventory and site restoration liability which has been disclosed as an exceptional item during the quarter.