Leading alloy-maker JSW Steel on Wednesday reported a net loss of Rs 107 crore on a consolidated basis for the first quarter ended June 30, 2015. The Sajjan Jindal-led firm had clocked a net profit of Rs 657 crore in the year-ago period, it said in a BSE filing. The total consolidated income of the company too declined by 13 percent to Rs 11,601 crore in April-June quarter of this fiscal from Rs 13,254.07 crore in the same quarter of the 2014-15 fiscal.
Company's total expenses, however, fell to Rs 10,887.42 crore from Rs 11,437.80 in the reported quarter. During the April-June quarter, the company's crude steel production grew by 10 percent to 3.4 million tonnes (MT) from 3.1 MT in the year-ago period. Saleable steel production was up 8 percent to 3.11 MT from 2.88 MT during the same period.
The firm strategically reduced share of exports to 14 percent of total sales during April-June and despite intensifying competitive intensity due to influx of imports, domestic sales volume grew 29 percent year-on-year to 2.66 MT, it said. "More importantly, with ramp up of downstream facilities the share of value added and special steel products improved to 35 percent of total sales, during the quarter," it added. The firm said implementation of the capacity expansion project, from 3.3 MT per annum to 5 MTPA, at Dolvi in Maharashtra and other ongoing projects are progressing satisfactorily and are likely to complete as per schedule.
Projecting a weak economic scenario, JSW Steel said on the outlook: "The IMF has revised down its forecast for world economic growth for calendar year (CY) 2015 from 3.5 to 3.3 percent. Global economic outlook has moderated with slower growth in advanced economies in H1 2015 and continued slow down in emerging market and developing economies." World steel production was down 2 percent in the first half of CY 2015 and almost all regions witnessed a decline. Increased exports from China is driving a global supply glut, it added.
Global steel industry faces pressures from surging exports from steel surplus countries, moderating demand, lower iron ore and coal prices and currency volatility, it said. On India, JSW Steel said: "Tighter liquidity conditions, leveraged corporate balance sheets and progress of monsoon are key risks." India steel industry continues to suffer from a surge in imports at a price significantly lower than domestic prices in exporting countries, especially China, South Korea and Japan, it added. "Consumption of domestically produced steel was down by 0.4 percent in April-June of 2015-16 as imports were up by 57 percent y-o-y," it said.
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