JSW Steel Q1 Results: Profit Rises On Higher Steel Prices
JSW Steel Ltd.’s quarterly profit rose, beating estimates, on higher prices of products like hot-rolled coil.
The steelmaker’s net profit increased 40.6% sequentially to Rs 5,904 crore in the three months ended June, according to its exchange filing. That compares with the Rs 4,850-crore consensus estimate of analysts tracked by Bloomberg.
Consolidated revenue rose 7.3% to Rs 28,902 crore, against the Rs 28,492-crore forecast. The top line growth was led by higher steel prices and improved product and market mix.
Operating profit increased 21.7% to Rs 10,274 crore, compared with a forecast of Rs 9,159 crore. Higher realisation from export and domestic markets and enriched product mix to an extent was partially offset by the increase in raw material prices.
Ebitda margin expanded to 35.5% from 31.3%
Prices of hot-rolled coil rose more than 19% sequentially—or by around Rs 10,000 per tonne—during the quarter, according to Edelweiss Securities.
Ebitda Performance Of Overseas Units
Ohio unit reported operating profit $19.03 million vs Ebitda loss of $24.2 million.
U.S. plate and pipe mill operating profit of $24.45 million vs Ebitda loss of $6.60 million.
Italy arm reported Ebitda loss at Euro 4.76 million vs Ebitda loss of Euro 2.52 million.
Key Takeaway From JSW Steel’s Interview...
Maintains FY22 sales guidance; sees strong growth in the second half of the ongoing fiscal.
U.S. entities are now profitable; Italian unit to achieve break-even in H2 FY22.
Q2 should see margin hit given sharply higher coking coal and lower average selling price per tonne.
Good pickup in domestic steel demand from festive season or quarter ending September.
Demand from steel globally remains strong.
Steel prices witnessed some correction in July, in line with Asian markets.
Does not see further downside in steel prices; but expects cost escalation.