“The company registered strong VASP (Value-added & Special Products) volume, with the share of VASP at 60% vs 51% in Q2 FY2021, driven by increased domestic sales to automotive, solar and appliance segments,” JSW Steel said in a media statement on Thursday.
It reported a net profit of Rs 5,900 crore in the first quarter.
Amid the ongoing thermal coal crisis and high costs of coking coal, JSW Steel has had a sharp impact in its power and fuel expenses, which climbed nearly 70% to Rs 2,361 crore.
Industry sources said that JSW Steel is considering an energy surcharge linked to coal, and that could be passed on to steel consumers. This is to help offset the rising coal and raw material prices.
In the quarter under review, JSW Steel registered its highest ever quarterly revenue from operations of Rs 32,503 crore, up 40.73% yoy and operating earnings (Ebitda) of Rs 10,417 crore, with an Ebitda margin of 32%. The company’s total expenses during the quarter went up by 43% to Rs 24,261 crores.
In the month of October, JSW Steel commenced integrated operations of its 5 MTPA brownfield expansion at Dolvi.
“The 5 MTPA brownfield expansion at Vijayanagar is progressing well, with civil works underway at the site,” said the statement.
During the quarter, the company spent Rs 3,639 crore on capex, against a total planned capex spend of Rs 18,240 crore for FY22.
JSW Steel reported steel production of 4.10 million tonnes, with average capacity utilization of 91% for the quarter, similar to Q1 FY2022, mainly due to planned shutdown at Vijayanagar.
Sales of saleable steel for the quarter were 3.79 million tonnes, higher 5% QoQ.
“Sales were affected by some inventory build-up due to the start of the company’s new downstream facilities and increase in inventories at the ports,” the company said in a statement.
Exports during the quarter increased by 26% QoQ as domestic demand was subdued due to the monsoons.
“While domestic auto production, especially passenger vehicles, declined on the back of global chip shortages, albeit is expected to revive once chip supply eases….Construction and infrastructure activities are expected to gain momentum in the second half of FY 2022,” JSW Steel said.
Its consolidated net debt as of September 2021 stood at Rs 55,394 crore up 4.7% yoy. Consolidated Net Gearing stood at 0.92x at the end of the quarter as against 1.04x at the end of Q1 FY2022.
