JSW Steel reported a loss of Rs 382 crore in the June quarter against a profit of Rs 50 crore logged in the same period last year. The company plunged into the red due to a forex loss of Rs 862 crore.

Net sales improved two per cent to Rs 10,141 crore (Rs 9,902 crore). The results are not comparable with last year’s as JSW Steel recently merged three of its subsidiary with itself.

Seshagiri Rao, Joint Managing Director, said the company has managed to better its productivity despite unreasonably high iron ore prices in the e-auction, fall in steel prices and large scale steel imports.

“If not for the notional forex loss, the company would have fared much better financially too. We emerged the largest steel producer with 14.3 million tonnes (mt),” he added.

JSW Steel’s earnings before interest, taxes, depreciation and amortisation (Ebidta) margin improved to 18.7 per cent against 18.3 per cent in the March quarter. This was largely due to cost reduction measures which includes commissioning of seven projects at Vijaynagar in Karnataka, two each at Dolvi and Vashind in Maharashtra.

The company has a net debt of Rs 29,135 crore and debt gearing of 1.38 times. JSW Steel’s debt is equally divided in rupee and foreign currency, while that of JSW Ispat Steel was 90 per cent in rupee and 10 per cent in foreign currency. After the merger, the group’s rupee debt increased to 61 per cent.

“We want rupee and foreign currency debt to be in an equal ratio. So, we will refinance Rs 5,500 crore debt, for which we are paying about 11.75 per cent interest. We may raise funds abroad or take fresh rupee debt at lower rates,” said Rao.

Shares of JSW Steel were up six per cent at Rs 565 on Wednesday.

> suresh.i@thehindu.co.in

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