Q3 Results: JSW Steel’s Profit Slips, Misses Estimates
JSW Steel Ltd.’s profit for the December-ended period fell due to higher expenses and lower sales.
Net profit dipped 7 percent year-on-year to Rs 1,624 crore. Analysts tracked by Bloomberg had pegged it at Rs 1,727 crore.
The steelmaker’s revenue rose 11 percent to Rs 20,318 crore on a yearly basis, in line with the Bloomberg estimate of Rs 20,919 crore. Its saleable steel sales was 3.62 million tonnes, a 10 percent fall from a year ago. Exports declined 70 percent year-on-year due to muted demand and weak pricing, accounting for 10 percent of total sales.
The company, however, said it was on track to achieve the crude steel production guidance of 16.75 million tonnes per annum for the financial year 2019.
Consolidated Ebitda per tonne was up 30.1 percent at Rs 12,434 compared to an estimated Rs 11,004.
Earnings before interest, tax, depreciation and amortisation rose 17 percent to Rs 4,501 crore despite an increase in costs of key inputs like iron ore, coal, energy prices, and other consumables. Its operating margin expanded 100 basis points year-on-year to 22.1 percent.
Bid For Bhushan Power & Steel
Joint Managing Director and group Chief Financial Officer Seshagiri Rao said JSW Steel was awaiting a letter from the committee of creditors. The company will submit a resolution plan for Bhushan Power & Steel Ltd. to the National Company Law Tribunal for approval and that “funding arrangements” for the acquisition had been made, he said
On Feb 4, the National Company Law Appellate Tribunal ruled that JSW Steel’s revised offer for Bhushan Power & Steel was valid under the Insolvency & Bankruptcy Code. The appellate tribunal was hearing a petition filed against the revised offer by Tata Steel Ltd., the highest bidder for the asset in the first round of bidding.
In its revised offer, JSW Steel had bid Rs 19,300 crore for Bhushan Power compared with Rs 19,000 crore offered by Liberty House U.K.
As on Dec. 31, the company’s net debt-to-equity stood at 1.40 times, while its net debt-to-Ebitda was 2.32 times.
Shares of JSW Steel rose nearly 3.4 percent to Rs 282.90 apiece after the earnings announcement.