|Hot Pursuit||Thursday, July 26, 2012 15:28 Hrs IST|
JSW Steel declines on weak Q1 results
The result was announced during trading hours today, 26 July 2012.
Meanwhile, the BSE Sensex was down 200.99 points, or 1.19%, to 16,645.06.
On BSE, 4.64 lakh shares were traded in the counter as against an average daily volume of 4.44 lakh shares in the past one quarter.
The stock hit a high of Rs 675 and a low of Rs 640 so far during the day. The stock had hit a 52-week high of Rs 885 on 27 July 2011. The stock had hit a 52-week low of Rs 464 on 20 December 2011.
The stock had outperformed the market over the past one month until 25 July 2012, rising 3.38% compared with the Sensex's 0.21% fall. The scrip had, however, underperformed the market in past one quarter, sliding 2.67% as against 1.78% fall in the Sensex.
The large-cap company has an equity capital of Rs 223.12 crore. Face value per share is Rs 10.
JSW Steel reported highest ever quarterly production of crude steel of 2.143 million tons. Production volume grew by 27% in crude steel, 36% in rolled flat products and 27% in rolled long products in Q1 June 2012 over Q1 June 2011. The company achieved a growth of 23% in sales volume and 28% in net sales value, compared to that of corresponding quarter of the previous year.
The turnover and net sales for the quarter stood at Rs 9910 crore and Rs 9030 crore, respectively, showing a growth of 30% and 28% over the corresponding quarter of previous year, mainly due to higher volume and improved sales realisation. The operating EBITDA (earnings before interest taxes depreciation and amortization) for the quarter is Rs 1773 crore, 24% over the corresponding quarter of previous year and the company posted a net profit after tax of Rs 269 crore.
Due to unusual depreciation in the value of the rupee against US dollar during Q1 June 2012, the net loss of Rs 592 crore restatement of foreign currency monetary items at close of the quarter has been considered by the company to be exceptional in nature.
The company said the availability and quality of iron ore in E-auction in Karnataka remained a bottleneck during Q1 June 2012 due to reduced inventory in stock pile being auctioned and delay in reopening of category 'A' mines, which led to loss of production and increase in cost. Vijaynagar works could operate at about 80% capacity utilisation during Q1 June 2012.
The company reported a consolidated turnover, operating EBITDA and net profit after tax of Rs 10781 crore, Rs 1908 crore and Rs 50 crore, respectively, after incorporating financials of subsidiaries, joint ventures and associates. The net total debt gearing at consolidated level was 1.09 as on 30 June 2012 (as against 0.89 as on 31 March 2012).
In its outlook, JSW Steel said the world's crude steel production has marginally grown by 1% to 767 million tons during the first half of 2012 due to the continuing recessionary trend in Europe and slowing economy in China. The base level demand of steel still remains positive. However, the growth is expected to be lower at about 3.3% in 2012, vis-à-vis earlier forecast of 3.9% owing to global economic slowdown. It added that weakness in prices of major inputs like iron ore and coal coupled with supply side corrections in high cost regions will keep global steel prices range bound in coming months.
In the background of such challenging situation, India registered a growth in steel consumption at 7.6% in Q1 June 2012 over Q1 June 2011 as per the recent report of Joint Planning Committee.
Though a weak monsoon, slowing industrial activities and investments will certainly pose challenges for the Indian steel industry, however with the expectation of economic reforms being undertaken, the medium and long term steel consumption should remain intact, the company said in a statement.
JSW Steel, belonging to JSW group, part of the O P Jindal Group, is one of the lowest cost steel producers in the world. The group has diversified interest in mining, carbon steel, power, industrial gases, port facilities, Aluminium, Cement and Information Technology. JSW Steel Limited is engaged in manufacture of flat and long products viz. H R Coils, C R Coils, Galvanised products, Galvalume products, auto grade / white goods grade CRCA Steel, Bars and Rods. Incorporated in 1994, it has grown to US $ 9 billion in little over fifteen years. JSW Steel Limited has the largest galvanizing and colour coating production capacity in the country and is the largest exporter of galvanized products with presence in over 100 countries across five continents.