JSW Steel Q4 net up 30 at R794 cr

Rise in volumes and increase in steel prices help company snap up better-than-expected results

Sajjan Jindal-led JSW Steel has reported a better-than-expected 30 per cent growth in its consolidated net profit to Rs 793.63 crore for the fourth quarter ended March 2011 against Rs 611.02 crore in the corresponding quarter last year as the rise in volumes and increase in steel prices in the March quarter led to the companys bottomline growth.

The companys net sales during the quarter stood at Rs 7,209.35 crore,up 32.49 per cent compared to Rs 5,441.30 crore in Q4 FY2010. For the full year ended March 31 JSW reported a net profit growth of 9.79 per cent yoy to Rs 1,753.98 crore,with 26.07 per cent yoy growth in net sales to Rs 23,900.24 crore.

The companys consolidated net total debt gearing as on March 2011 stood at 0.84 against 1.65 last year. Net debt in JSWs books as on March 2011 stands at Rs 14,200 crore. It also has cash of Rs 2,300 crore as on date.

During the year,the company achieved crude steel production of 6.4 million tonnes with sales volume of 6.09 million tonnes.

In FY2012,JSW Steel is targeting to achieve 8.75 million tonnes of crude steel production with total sales volume of 9.million tonnes, said Sajjan Jindal,vice-chairman and MD of JSW Steel. The steel major,which recently bought a controlling stake in Ispat Industries,expects capacity to touch 14 million tonnes,including Ispat,by next month.

Shares of JSW Steel on Monday slipped 1.52 per cent to close at Rs 921.10 on the Bombay Stock Exchange. JSW Steels net profit is higher than expected due to better average realisations, said Anand Shanbhag,executive director and head of research,Avendus Securities.

Average realisations increased by 12 per cent quarter on quarter against our expectations of 6.3 per cent. The companys EBIDTA per tonne also stood higher at Rs 9,123, he added.

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Meanwhile,the company said it has reviewed the progress of the on-going capex programmes and announced its next phase of expansion to 12 mtpa from 10 mtpa at Vijayanagar. The additional two million tonnes expansion at Vijaynagar is at an estimated cost of Rs 2,695 crore and will be financed by way of cash accruals to the extent of Rs 945 crore and balance through debt.

We have raised the debt amount by way of foreign currency loan, said Seshagiri Rao,joint MD and Group CFO,JSW Steel Ltd. The projects are expected to be completed by June 30,2013. Rao also revealed that the company has planned a capex of Rs 15,000 crore excluding West Bengal expansion to be spent over a period of three years.

We will spend Rs 8000 crore in FY2012 and the balance Rs 7000 crore in the next two years, Rao said.