JSW STEEL LIMITED 
By Press Release 03 09-1O 20.01.2010
JSW Steel reports Net Profit of Rs.514.23 Crores (stand alone)JSW Steel Ltd. Net Profit for the current quarter Q3 FY 09-10 zooms to Rs.514.23 crores, vis-à-vis net loss of Rs.127.50 Crores in corresponding quarter of the last fiscal, mainly driven by strong growth in volumes, reduction in cast and forex gains.
The plant operations at Vijayanagar Works were disrupted due to unprecedented & incessant rains followed by floods in southern part of India in October 2009. The Company achieved normal operations by December 2009. The operational performance could have been much better if the normalcy was there during October & November 2009.
In spite of this set back, the performance by the Company during the Quarter was impressive.
The key performance highlights are as under:
Q3 FY 10
Vs Q3 FY 09
))- Volume growth (Crude Steel Production):
))- Saleable Steel sold
))- Net sales
))- EBIDTA
):> Operating Margin
):> Profit after tax
);> EPS (Diluted)
))- Net Long term Debt gearing (Standalone):
88%
100%
65%
182%
24.2% .........
Rs. 514.23 Crore
Rs. 27.04
1.07
Operational Performance:During the quarter, the production of Rolled Products, both Long & Flat (including Value Added Flat), went up significantly compared to fast fiscat & atso improved sequentially. HR Coil production has reached highest levels at 0.88 Million tonnes. equivalent to 3.5 Million tonnes annualized, which is around 110% of enhanced ratea capacity of 3.2 Million tonnes on modemization of Mill last year. The HR production is expected to go up further. on commissioning of new Hot Strip Miti by March 201O.
During nine months period of current fiscal, Crude Steel Production & Saleable SteeJ
votumes have been 4.39 Million tonnes & 4.20 Million tonnes. showìng a growth of
59% & 78% respectively over corresponding period of last fisc t. which is around
69% of volume guidance of 6-.4 Million tonnes & 6.1 Million torìnes, respecttvely for
FY 2010.
The domestic sales volume continued to show rising trend. constituting 84% of the total sales for current quarter as against 78% in the corresponding quarter of fast year, in fine with company's strategy of·il'lcreased focus in the domestic markets. The no. of JSW Shoppe outlets went up to 104 and the Retail sales for the nine months period of current fiscal, through JSW Shoppe accounted for 15% of domestic sales. excludìng semis.
The various cost reduction initiatives taken by the Company. such as. increased coal injection in blast furnace. lower usage of fluxes, higher captive power geperation.
increase in utilization of Corex Gas, usage of Gas from Recovery type Coke Ovens. reduced power consumption, etc.. along wtth lower input costs led to reduction in blended cost of production by 31% over corresponding quarter.
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The Break-uoof sales and oroductionvolumes are as under·
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( Million torines ) (MHiion tonnes) Growth %
Products | Q3 FY10 | Q3 FY09 | 9m FY10 9m FY09 | Q3 | 9m | |
Production: - Crude Steel | 1.469 | 0.782 | 4.386 2.758 | 88% | 59% | |
Sales: | ||||||
- Semis | 0.272 | 0.060 | 0.988 | 0.432 | 353% | 128% |
- Rolled: Flat | 0.908 | 0.572 | 2.633 | 1.737 | 59% | 52% |
- Rolled:Long | 0.245 | 0.079 | 0.579 | 0.197 | 210% | 195% |
TotalSaleable Steel | 1.425 | 0.711 | 4.200 | 2.366 | 100% | 78% |
FinancialPerformance:
The Gross Turnover and Net Sales for the quarter stood at Rs. 4,889.41 Crores and Rs. 4,587.66 Crores, respectively, showing a growth of 60% and 65% over the corresponding quarter of previous year, mainly driven by volumes in spite of lower realizatìons. The EBIDTA for the quarter was Rs.1,222.15 Crores inctuding forex gains of Rs.102.55 Crores and the EBIDTA margin for the quarter was 26.5% as against 15.3% in the corresponding quarter. The Company posted a Profit after Tax of Rs.514.23 crores.
The Company's net long term debt gearing was at 1.0.7 (as against 1.1O as of 30th
September 2009) and the weighted average interest cost was at 7.88% (as against
7.85% as at end September '09).
The Company reported Consolidated Gross Turnover; EBIDTA and Profit after Tax of Rs.5,097.76 Crores, Rs.1,182.19 Crores and Rs.429.70 Crores, respectively, after incorporating the financials of subsidiaries, joint ventures and associates.
The consolidated net long term debt gearing was at 1.53 (vis-a-vis 1.60 as on
30.09.2009).
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The Company accounted Rs.86.91 Crores as insurance claim receivable during the quarter towards cost of raw materia! stocks washed away by floods in October
2009.
Projects:
The company commissioned 2 units of Beneficiation Plant of 250 tph (Phase l)
during the quarter, at its Vijayanagar Works.
The implementation of state of-the-art new Hot Strip mill at Vijayanagar works and blooming mill at Salem works are progressing at a brisk pace to be commissioned in the current fiscal year.
The project execution work is progressing in full swing to expand the crude steel capacity to 10 MTPA and to set up 300 MW Power Plant at Vijayanagar Works, to be commissioned by March 2011.
The Panel of Judges for "Prime Minister's Trophy 2007-08" have adjudged "JSW Steel
Ltd." - the Runners Up amongst the Best performing lntegrated Steel Plants in India.
The Company's Vijayanagar Works has also bagged the prestigious energy saving national award, instituted by CII - Sohrabji Godrej Green Business Centre, in the name of "EXCELLENCE IN ENERGY MANAGEMENT 2009" for the second consecutive year.
The Board of Directors has accorded their consent for formation of a SPV between JSW Bengal Steel Ltd. (Subsidiary of JSW SteelLtd.) and JSW Energy Ltd., for setting up a Power Plant of 1600 MW capacity (2 x 800 MW) in West Bengal, using Thermal Coal from lchhapur Coal Mines subject to approvals as may be required.
The JSW Bengal Steel Limited will have 26% shareholding in the SPV, so as to be entitled to 51% of power generated by the SPV, as captive consumer of power, in terms of regulations of the Electricity Act, 2003. The remaining 74% shares will be
held by JSW Energy Ltd.
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The total investment is about Rs. 9,680 crores, comprising of Rs. 7,680 crores for the
power plant and Rs. 2,000 crores for .the development of Mines. The project cast is
o • • • •
proposed to be funded on a debt equity ratio of 3:1. The total equity and the debt will be Rs. 2,420 crores and Rs. 7,260 crores, respectively. The share of JSWBSL being a 26% stakeholder in the SPV, works out to Rs. 629 crores.
The target date for completion is 31st March 2014 for the ftrst unit and 31st March 2015 for the second unit.
OutlookThe recovery in world economy is gaining momentum as evidenced by rising PMI of major economies, signiftcant improvement in Industriai Production index across economies, narrowing TED spreads, falling Credit Default spreads, Jmproving commodity index, falling volatility index and firming stock market indices.
The capacity utilization in Global steel industry is improving with operating rates heading close to their average operating levels, on the back of a strong growth in apparent steel consumption. The end of de-stocking is expected to fuel demand in most of the advanced economies.
The strong consumption growth achieved in second half of 2009 is expected to continue in 201O and the forecasts by WSA indicate strong world steel consumption growth of 9.2% in 2010, mainly led by China and India.
lndia's steel production growth has been much below the consumption levels, leading to rising imports and declining exports. The IIP has shown a robust yoy growth of
11.7% in Nov. '09, indicating sustainability of country's economie growth and inherent resilience · of the lndian economy. Further, up tick in various sectors, including
infrastructure, construction and Auto sectors·further enhances prospects of growth in
Apparent Steel consumption.
The rise in spot raw materia! prices for key inputs viz. iron ore and coking coal and strong demand recovery ili keep the steel prices stable with upward bias.
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About JSW SteelLimited
JSW Steel Limited, belonging to JSW group, part of the O P Jindal Group, is one of the lowest cost steel producers in the world. The group has diversified interest in Mining, Carbon steel, Power, Industriai gases, Port facilities, Aluminium, Cement and lnformation Technology. JSW Steel Limited is engaged in manufacture of flat and long products viz. H R Coils, C R Coils, Galvanised products, Galvalume products, auto grade l white goods grade CRCA Steel, Bars and Rods. lncorporated in 1994, it has grown to US $ 3.5 billion in a little over a decade. JSW Steel Limited has the largest galvanizing and colour coating production capacity in the country and is the largest exporter of galvanized products with presence in over 100 countries across five continents.
Forward looking and Cautlonarv Statements:
Certain statements in this release conceming our future growth prospects are forward looking statements,
which involve a number of risks, and uncertainties that could cause actual resu/ts to differ mater;al/y from those in such forward looking statements. The risks and uncertainties relating to these statements include, but are not /imited to, risks and uncertainties regarding fluctuations in eamings, our ability to manage growth, intense competition within Steel lndustry including those factors which may affect our cast advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, our ability to manage our interna/ operations, reduced demand for steel, our ability to successful/y complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which - has made strategie investments, withdrawal of fiscal govemmental incentives, politica/ instability, legai restrictions on raising capitai or acquiring companies outside India, unauthorized use of our intelfectual property and generai economie conditions affecting our industry. The company does not undertake to update any forward looking statements that may be made from time to time by or on behalf of the company.
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