In quarter ended June 2012, JSW Steel reported way below market expected consolidated net profit of Rs 49.65 crore, down by whopping 90% largely on heavy forex losses due to steep rupee depreciation and EO expense.

The topline grew by healthy 33% to Rs 9909.89 crore primarily reflecting the steel sales and further aided by healthy power sales. However the operating profit margin (OPM) fell by 80 bps on lower steel margins. Thus the operating profit grew by limited 28% to Rs 1908.46 crore.

The consolidated operating income grew by healthy 33% to Rs 9909.89 crore in June 2012 quarter on healthy steel sales and further aided by impressive power sales. The steel sales grew by 31% to Rs 9776.87 crore on improved sales realization and volumes. The sales volume grew by 23% to 2.109 MT on healthy demand for rolled flat and long steel products. The rolled flat steel sales grew by 30% to 1.672 MT while rolled long products grew by 31% to 0.383 MT. Only sale of semis crashed by 61% to 0.054 MT. The sales of steel were limited to the extent of production on account of constrained availability of iron ore in e-auction in Karnataka due to reduced inventory in stock pile being auctioned and delay in reopening of Category A mines. The power sales grew by impressive 121% to Rs 1064 crore.

The OPM fell by 80 bps to 19.3% on lowering of steel margins. Thus the operating profit grew by limited 28% to Rs 1908.46 crore. The PBIT margin of steel crashed by 820 bps to 4% partly impacted by lack of iron ore availability which led to increased cost. Thus its PBIT crashed by 60% to Rs 349.16 crore. On the other hand, power segment's PBIT margin grew by 230 bps to 24% thereby boosting its PBIT by impressive 145% to Rs 255.10 crore.

The PBT more than halved to Rs 350.84 crore primarily on spike in forex losses. The forex losses surged to Rs 594.84 crore from Rs 35.21 crore in June 2011 quarter on restatement of foreign currency monetary items due to steep rupee depreciation against USD. Besides forex losses, the profits were also limited by 66% spike in interest cost to Rs 460.50 crore. However the other income grew by impressive 103% to Rs 31.10 crore. The depreciation cost grew by 20%to Rs 533.38 crore. EO expense net tax of Rs 159.70 crore and higher tax rate drastically pulled down the net profit by whopping 90% to Rs 49.65 crore.

On standalone basis, the topline grew by 28% to Rs 9037.60 crore while net profit crashed by 53% to Rs 269 crore largely drained by spike in forex losses on steep rupee depreciation.

Chile Iron-ore mines:

During the quarter Company made shipment of 0.34 Million tons of Iron ore concentrate and earned EBIDTA of $8.48 million.

US Coal mines:

Department of Environmental Protection (DEP) permit applications for various mines are being pursued. The Company sold 0.009 Million net tons of coal during Q1 FY 2012-13.

US Plate and Pipe Mill operation:

The Subsidiary Company produced 0.098 million net tons of Plates and 0.022 million net tons of Pipes with capacity utilization at 39% & 16% respectively. Sales volumes for the quarter are 0.069 million net tons of Plates and 0.022 million net tons of Pipes. The Company earned EBIDTA of $ 6.48 million during Q1 FY 2012-13.

JSW Ispat Steel (JSWISL):

HR Coils production during April'12 to June'12 quarter was 0.69 million tones with capacity utilization of 83% and during July'11 to June'12 year was 2.48 million tones with capacity utilization of 75%.

Operating EBITDA for April'12 to June'12 quarter was Rs.454 Crore and Net profit was Rs.478 Crore after considering Exceptional items write off of Rs.339 crore. Operating EBITDA for July'11 to June'12 year was Rs. 1,176 Crore and Net Loss was Rs.317 Crore after considering Exceptional items of Rs.586 crore.

• During the quarter, the Company has made additional investments aggregating Rs. 8519 lakh in subsidiary, associate and joint venture companies.
• In respect of the Company's long term, strategic investment in one of its subsidiaries, JSW Steel (USA) Inc., the Company has reviewed and assessed its business plans and expected future cash flows. The company has also considered an independent valuation of a significant portion of its underlying tangible assets. Whilst the subsidiary may have a longer gestation period than originally envisaged, the Company has concluded that the decline is temporary and no provision against the carrying amounts of the investment and loans of Rs. 274056 lakh is presently necessary.
• Paid up equity share capital does not include an amount of Rs. 6103 lakh being the amount originally paid up on the equity shares forfeited in an earlier year.
• The promoters' share in the total shareholding stands at 38.05% as on 30^th June 2012. The promoters' have pledged 19.36% of total shares of the company in June 2012 quarter.

Currently the scrip is trading at Rs 657 on BSE.

JSW Steel: Consolidated Results

JSW Steel: Consolidated Segment Results