JSPL Q4 net profit declines 69.5% to Rs466 crore

The year ago, however had seen steel manufacturers benefit from an extraordinary rise in steel prices post the start of the Russia Ukraine War. The raw material costs also remained significantly lower during the year-long quarter.

The company’s adjusted Ebitda (earnings before interest tax depreciation and amortisation) at ₹2,240 Crore adjusted for one-off FX loss of 53 Crore) came siignificantly lower than ₹2899 crore in the year ago quarter and slightly lower than adjusted Ebitda of ₹2,296 crore in the previous quarter.

While the company’s consolidated numbers include performance of overseas operations that saw higher volatility, the Indian operations did report comparatively better show.

JSPL’s domestic steel operations did benefits fromsequential rise in steel prices though these benefits to some extent were negated by volatility in raw material prices.

The Iron Ore fines prices rose 40% while lumps were up 14% sequentially. Even Premium Hard coking coal prices CFR India were up 21% sequentially highlighted the company.

The company said that the increase in steel realisations was partly offset by the higher raw material costs, especially iron-ore resulting in improvement in adjusted standalone Ebitda by 1% sequentially to ₹2,178 crore.

The company’s standalone net profit for the quarter stood at Rs 789 Crore, which was 39% lower year-on-year but better than Q3 where JSPL had reported a net loss of Rs 4,512 crore.

The company reported production of 2.02 mt (million tonne) during the quarter was marginally down by 2% sequentially. However, sales at 2.03 mt rose 7% sequentially.

Pellet production at 1.90 mt declined 3% sequentially and external pellet sales were 42kt compared to 53kt in 3QFY23. This took away the benefit of higher pellet prices that rose 19% sequentially to ₹9963 a tonne.

Exports, however, accounted for 11% of the total sales volume during the quarter compared to.5% in 3QFY23 reflecting a revival in exports post withdrawal of export duty.

The company is on track to double Angul steel manufacturing capacity by FY25 (from 6 mt per annum to 12.5 mtpa). Its total capacity will rise to 15.9 mtpa by FY25 and 12.9 mtpa by FY24 from currently around 9.6 mtpa. The company also has environment clearance for around 19 mtpa in place, and the expansions will continue beyond FY25.

“We are on track with our stated growth plans and are working towards making our Angul Integrated steel complex as more cost competitive with the opening of coal mines at Utkal-c in near future”, said Mr Bimlendra Jha, Managing Director, Jindal Steel & Power in a statement.

The company has further reduced its net debt by ₹1,923 Crore during FY23. Consolidated net debt as on 31st March’23 stood at 6,953 Crore. Net debt to EBITDA stood at 0.7x as on 31st Mar’23 versus 0.7x as on 31st December’23 and 0.6x as on 31st March ’22.

Thus the company’s balance sheet is in better shape and ready to support the next phase of growth.

“The company’s balance sheet is the strongest amongst the large integrated steel players in India and our leverage ratios are also amongst the lowest compared to the large integrated steel players in India despite a volatile macro environment. Our focus on cash generation is one of the key factors driving our growth” added Jha.