JSW Steel on Monday reported a 6.45% drop in consolidated net profit to Rs 234.08 crore in the first quarter of the financial year 2009-10, from Rs 250.23 crore in the corresponding quarter last year.
Additionally, a 10.39% decline in consolidated revenues from Rs 4,479.42 crore in Q1 FY08-09 to Rs 4013.78 crore in Q1 FY09-10 was reported. ?The losses incurred by the company is mainly due to losses in US operations caused by demand contraction and consequent lower capacity utilization of the plate and pipe mill,? said Sajjan Jindal, vice chairman & MD, JSW Steel.
JSW Steel expects its operating margins to go up to $150 per tonne for FY10 from the current $120 per tonne. The company plans to reduce its per tonne cost of production from $315 to $275 by FY11 by reducing fuel consumption, lowering usage of fluxes, increasing usage of corex gas and improvement in usage of gas from recovery type coke ovens.
?We had given a growth guidance of 78% last quarter for FY10 and we have been on track and have achieved a volume growth of 41% in crude steel production and 62% in saleable steel during the current quarter,? added Jindal.
On the cards is completion of a 11million-tonne steel plant at Vijaynagar by March 2011 that will bring investment of about Rs 10,000 crore. The company will draw a debt of Rs 900 crore for the year. Work at Jharkhand and West Bengal plants are expected be slower than Vijaynagar and Salem plants.
?We will raise QIP only to reduce our debts and we won?t go for it immediately. Projects are on track, costs are falling, product-mix is improving, retail is increasing and exports are being reduced,? said Jindal.
In the June quarter, overall Ebitda margin was Rs 988 crore, while the operating Ebitda for the company was Rs 746 crore. JSW Steel shares on Monday closed at Rs 602.95, up by 0.43% on BSE.