JSW Steel reports Rs 2,773 cr net profit in Q2, capex at Rs 3,816 cr

New Delhi: Private steelmaker JSW Steel on Friday reported returning to black as it posted a consolidated net profit of Rs 2,773 crore for the July-September quarter on the back of higher income and exceptional gains.

The company suffered a loss of Rs 915 crore in the second quarter of the last financial year.

The total income increased to Rs 44,821 crore in the second quarter of the current fiscal as against Rs 41,966 crore a year ago, JSW Steel said in a regulatory filing.

JSW Steel's expenses were lower at Rs 40,801 crore in the quarter under review against Rs 43,354 crore in the year-ago quarter.

In a statement, the company said its capex spend during the second quarter of 2023-24 (FY24) in India was Rs 3,701 crore and at consolidated level Rs 3,816 crore.

During the first half of 2023-24, the capital expenditure in India was Rs 7,795 crore and consolidated Rs 7,996 crore, against the planned capex spend of Rs 18,800 crore in India and Rs 20,000 crore consolidated for FY24.

The company produced 6.34 million tonnes (MT) of crude steel in July-September 2023, up 12 per cent compared to 5.66 MT in the same quarter of FY 2022-23.

Sales increased by 10 per cent to 6.34 MT in the quarter from 5.74 a year ago. Exports, at 0.69 MT constituted 11 per cent of sales from the Indian operations.

The company had taken certain maintenance shutdowns at Indian operations during the quarter, and the average capacity utilization was 89 per cent. The capacity utilization was lower at the Ohio, US operations due to adverse market conditions, JSW Steel said.

The company was able to reduce inventories by 0.3 million tonnes during the quarter.

The company had a "fair value gain of Rs 780 crores on its investments held in CSSL upon fair valuation pursuant to merger of CSSL and JISPL". It also had a gain of Rs 198 crore upon sale of property, plant and equipment and mineral rights held at West Virginia.

The company also noted an exceptional provision amounting to Rs 389 crores pursuant to dismissal of the company’s writ petition by High Court of Bombay, Goa Bench in the Goa Green Cess matter.

Debt increased to Rs 69,195 crore during the quarter, primarily due to additions of borrowings arising out of merger of JSW Ispat Special Products Limited (JISPL).

During the quarter, subsidiary company Bhushan Power & Steel (BPSL) registered crude steel production of 0.77 MT and sales of 0.80 MT. It reported a profit after tax of Rs 210 crore for the quarter.

JSW Steel Coated Products along with its subsidiaries, produced 1.07 MT products and reported a sales volume of 1.09 MT. The company reported a Rs 113 crore PAT for the quarter.

In the US, JSW Steel USA Ohio's electric arc-based steel manufacturing facility produced 1,51,313 net tonnes of slabs during the quarter. Sales volumes for the quarter stood at 59,136 net tonnes of HRC (hot rolled coil) and 1,16,091 net tonnes of slabs.

It reported an EBITDA loss of USD 29.4 million for the quarter. The US Plate and Pipe Mill based in Texas produced 88,090 net tonnes of plates and 5,052 net tonnes of pipes, reporting a capacity utilization of 37 per cent and 4 per cent, respectively, during the quarter.

Sales volumes for the quarter stood at 92,423 net tonnes of plates and 6,335 net tonnes of pipes. It reported an EBITDA of USD 25.96 million.

The company's Italy-based rolled long products manufacturing facility produced 61,520 tonnes and sold 78,651 tonnesof rolled products during the quarter. It reported an EBITDA of Euro 8.9 million for the quarter.

In June, National Company Law Tribunal approved the Scheme of Amalgamation of its Joint Venture, Creixent Special Steels Limited (CSSL) and CSSL’s subsidiary JSW Ispat Special Products Limited (“JISPL”) with the company. The scheme has become effective from 31 July 2023.

Sharing the update on projects, JSW Steel said its 5 MTPA brownfield expansion at Vijayanagar is progressing well, with civil works underway at the site.

The construction activities of all packages are currently underway and equipment erection has commenced. The project is expected to be completed by the end of FY24.

At JSW Steel Coated Products Limited, the colour-coated steel line of 0.12 MTPA in Jammu and Kashmir is expected to be completed in Q4 FY24.

The Phase-II expansion (from 3.5 MTPA to 5 MTPA) at BPSL is progressing well and is expected to be completed by the end of FY24. Part of O P Jindal Group, JSW Steel is a leading steel-producing company in India.