JSW Steel Q3 net down 26% at Rs 382 crore

MUMBAI: Sajjan Jindal-led JSW Steel today said it has posted a 25.65 per cent drop in net profit at Rs 382.3 crore in Q3 FY 11 as against Rs 514.23 crore in the year -ago period due to cost pressures, though sales hit a record.

"We must say Q3 was a good quarter. Despite cost pressure, we have posted a profit. We hope the next quarter will be good for us," JSW Steel Joint Managing Director and Group CFO Seshagiri Rao told reporters here.

The steel major clocked its highest-ever quarterly sales during the quarter at 1.593-million tonnes on the back of an enhanced production at its Vijayanagar facility.

Though the company's production increased by 11 per cent at 1.636-million tonnes over the corresponding quarter, its expenses on raw material and fuel went up by more than 38 per cent to Rs 3,898.79 crore from 2,818.82 crore a year-ago.

Net sales increased by 26 per cent at Rs 5,771.42 crore in the October-December quarter from Rs 4,587.66 crore in the same period last year, on enhanced production and better product-mix.

"We expect to produce 1.7-million tonnes of steel during January-March (2011) as against 1.64 million tonnes in the December quarter," Rao said.

The company expects to increase its coking coal production to 7 million tonnes in FY 12, he said. "Our annual coking coal requirement is under 5-million tonnes and we expect to increase it to 7 million tonnes in FY 12."

The steel firm plans to set up a new 2.3-million tonne cold-rolling mill complex at Vijayanagar in Karnataka at an investment of Rs 4,025 crore.