JSPL net profit drops 39 per cent to Rs 477 crore

KOLKATA: JSPL has reported a 39% drop in standalone net profit to Rs477.45 crore during Q4 of FY13 against Rs783.62 crore in the same period last year, a hit mainly by slowing steel demand. The company’s income from operations went up marginally by 1% in Q4 to Rs4,213.70 crore against Rs4,174 crore in the same period last year. For the financial year as a whole, JSPL reported a 4% drop in standalone net profit before exceptional items to Rs2,166.67 crore against Rs2,258.4 crore in the same period of FY12. Income from operations rose by 12% during the fiscal to Rs1,4954.70 crore against Rs13,334 crore in the previous fiscal.

On a consolidated basis, JSPL’s net profit went down 35% to Rs752.75 crore in the January-March 2013 quarter against Rs1161.53 crore. Its income from operations went up a slender 3% in Q4 of FY13 to Rs5,648.44 crore from Rs5,482.33 crore in the previous corresponding period. Consolidated net profit before exceptional items went down 14% at Rs3,485.74 crore in FY13 against Rs4,050.49 crore in FY12.

Income from operations went up 9% to Rs19,806.78 crore against Rs18,208.6 crore in FY12. The company’s consolidated results include results of its subsidiary, Jindal Power. Despite slow demand, JSPL said it achieved full utilisation of steel and pelletisation capacity during the year and expanded its market base by adding new countries and customers.

JSPL, which had so far focused mainly on B2B business, also made an impressive foray into the retail market by appointing 15 distributors to kick off channel sales. JSPL’s exports grew 30% to Rs1,927 crore in FY13 against Rs1,449 crore in the previous year.

Ravi Uppal, managing director of JSPL Group, said: “FY13 has been a defining year for us. We achieved and established operational efficiency in production of steel, pellets and power.

This shows the impending launch of our Angul project is well timed. We maintained a EBITDA margin of 30%. However, we booked depreciation of the new plant and took extra load of Rs574 crore on account of the mining issue in Bolivia. Also, we have to keep in mind, steel prices in Q4 FY13 were among the lowest when compared to prices in Q4 FY12 which were among the highest.”

“The industry is pinning its hopes on a reduction in interest rates in early May. If that happens, we should see some improvement in demand,” Kishor Ostwal, CMD of CNI Research said.