JSW Steel has reported strong performance for October-December 2020 quarter.
Standalone Performance Oct-Dec 2020 quarter
Crude Steel production: 4.02 million tonnes, down 5% YoY
Saleable Steel sales: 4.03 million tonnes, up 10% YoY
Flat Products sales: 2.98 million tonnes, up 14% YoY
Long Product sales: 0.88 million tonnes, down 2% YoY
Semis sales: 0.18 million tonnes, up 2% YoY
Domestic shipments: Up by 25% QoQ
Revenue from operations: INR 15,767 crores
Operating EBITDA: INR 2,667 crores
PAT: INR 691 crores
Consolidated Performance Oct-Dec 2020 quarter
Saleable Steel sales: 4.03 million tonnes
Revenue from operations: INR 18,055 crores
Operating EBITDA: INR 2,451 crores
PAT: INR 187 crores
JSW Steel Coated Products: During the quarter, JSW Steel Coated Products registered a production volume of 0.47 million tons and sales volume of 0.52 million tonnes. Revenue from operations and operating EBITDA for the quarter stood at INR 2,982 crores and INR 134 crores respectively. Net Profit after Tax stood at INR 50 crores for the quarter.
US Plate and Pipe Mill: The US based Plate and Pipe Mill facility produced 70,479 net tonnes of Plates and 14,669 net tonnes of Pipes, operating at a capacity utilization of 29% and 11%, respectively, during the quarter. Sales volumes stood at 52,749 net tonnes of Plates and 11,328 net tonnes of Pipes. It reported EBITDA loss of USD 12.6 million for the quarter, mainly due to lower realization and inventory write down of USD1.77 million.
JSW Steel USA Ohio (Acero): The US based HR coil manufacturing facility produced 74,272 net tonnes of HRC during the quarter. Sales volumes for the quarter stood at 58,611 net tonnes. It reported EBITDA loss of USD 25.19 million for the quarter, which includes an inventory write down of USD 2.02 million.
JSW Steel Italy (Aferpi): The Italy based Rolled long products manufacturing facility produced 174,523 tonnes and Sold 156,677 tonnes during the quarter. It reported EBITDA loss of 9.95 million Euros for the quarter.
Projects update: Key capex projects viz augmenting the crude steel capacity at Dolvi works from 5 to 10 million tonnes per annum, 12 to 13 million tonnes per annum expansion (except BF-3 enhancement) at Vijayanagar works, capacity expansion of CRM-1 complex at Vijayanagar works and certain other downstream projects are under advanced stages of implementation. The commissioning of certain projects is likely to be completed up to 3-6 months behind original scheduled timelines. The new 5 million tonnes per annum capacity at Dolvi Works is now expected to be commissioned during the first half of FY2021 from March 2020 earlier.
Mining update: Production from the four operating captive iron ore mines in Karnataka stood at 1.22 million tonnes in the quarter and 3.26 million tonnes in 9 months of 2020-21. Subsequently, Rama mine in Karnataka has already commenced operations in January 2020, and the Ubbalagundi mine is expected to commence operations soon.
M&A update: The company completed the acquisition of Vardhman Industries Limited in December 2019 for a total consideration of INR 63.50 crores. Accordingly, VIL has become a wholly owned subsidiary of the Company. Consequently, the shareholding of the Group in the joint venture, JSW Vallabh Tin Plate Limited has increased from 50% to 73.55%. VIL is mainly engaged in the manufacturing and marketing of Colour Coated Coils & Sheets and has a production capacity of 36,000 tonnes per annum with manufacturing facility located at Rajpura in Patiala in Punjab.
Outlook: Global steel spreads remained under pressure during the beginning of the quarter and hit lows during the month of October. A modest recovery in the month of November was followed by a strong momentum into December and January. The recovery is being driven by supply side adjustments and a modest pickup in steel demand. In India, the IIP and Manufacturing PMI prints have improved from the recent lows, signalling an improvement in business confidence and slight improvement in credit availability. The economy is still not completely out of woods as consumer sentiment remains subdued given weaker growth in the automotive and consumer durable volumes. The Indian steel sector is expected to grow significantly on the back of various initiatives of the Government pertaining to the domestic infrastructure and supportive monetary policies.