JSW Steel today reported consolidated net loss of Rs 923 crore in the third quarter of 2015-16 due to impairment charges of Rs 2,121 crore and fall in sales.
Sajjan Jindal-led steel major had clocked a net profit of Rs 328.98 crore in the corresponding quarter of 2014-15.
Consolidated net sales fell to Rs 8,621 crore from Rs 12,926 crore in the same period last year due to lower realisations and 16 per cent drop in sales volume on account of planned shutdown at three of the total seven blast furnaces of the company.
Total income fell by 34.22 per cent to Rs 8,698.27 crore in the October-December period from Rs 13,222.95 crore during the same quarter in 2014-15.
The company’s crude steel production fell by 15 per cent to 2.70 million tonnes (MT) during the quarter under review from 3.17 MT in the year-ago period, whereas saleable steel sales declined by 16 per cent to 2.55 MT from 3.03 MT.
“Topline was impacted by both lower volumes due to planned shutdowns (of blast furnaces) as well as lower steel pricing, which in turn, was exacerbated by a surge in imports at predatory prices,” JSW Steel Joint Managing Director Seshagiri Rao told reporters here.
“We had to review the overseas investments made during last few years, since prices of crude oil, coal and iron ore have significantly fallen from the time of investment and as per the appointed external agency, an impairment charge had to be taken in the December quarter,” Rao said.
In the third quarter, JSW Steel recorded impairment charges of Rs 2,121 crore towards fixed assets, goodwill and other assets comprising Rs 905 crore for its US operations of plate and pipe mill.
Other charges include Rs 172 crore for its coal mines operations in the US and Rs 1,045 crore for iron ore mines operation in Chile.
A grim business climate also led to JSW Steel reporting the lowest EBITDA per tonne since 2008 at Rs 3,443 per ton in the December quarter.
The blast furnace at Vijayanagar (Karnataka), which underwent a planned shutdown for relining and modification from August 2015, is expected to get restarted in the last quarter of the current fiscal, Rao said.
The blast furnaces at Dolvi (Maharashtra) and Salem (Tamil Nadu), too, went under shutdown for capacity expansion during the quarter and are likely to get re-commissioned in the last quarter of 2015-16. Other ongoing projects are progressing satisfactorily and are likely to complete as per schedule, Rao said.