Jindal Steel and Power (JSPL) on Wednesday posted a consolidated loss of Rs 87.4 crore for the quarter ended June. Losses were driven by higher raw material costs as seaborne iron ore prices remained strong because of concerns over supply disruption. The company had posted a profit of Rs 109.9 crore in Q1FY19, after 14 loss-making quarters. At the time iron ore prices were $64/MT, compared with $109/MT at the end of Q1FY20.
JSPL reported revenues of Rs 9,945.6 crore for the quarter, recording a rise of 3% year-on-year (y-o-y). Earnings before interest, taxes, deprecation and amortisation were Rs 2,139.4 crore, falling 3.4% y-o-y.
The company’s Ebitda margin was 21.5%, down 140 basis points year-on-year. The company had gained Rs 108.7 crore under ‘work in progress and stock in trade’ in the first quarter of FY19, compared with expense of Rs 45.6 crore under this segment in Q1FY20, contributing to lower Ebitda.
The company’s fuel cost continued to stay high after the cancellation of coal blocks by the Supreme Court in 2014. It is also paying higher interest as it borrowed Rs 3,300 crore to pay the additional coal levy. JSPL has claimed Rs 608.6 crore from the government for investments made in cancelled coal blocks but the Union coal ministry has made an interim payment of Rs 22.7 crore only. JSPL’s steel production went up 10% y-o-y in the quarter to 1.96 MT at the consolidated level. Rail deliveries were up by 126% y-o-y. “Recent initiatives by the government towards increasing liquidity in the market as well as any steps taken to safeguard against imports at predatory prices, especially from FTA countries, could propel steel demand for domestic manufacturers,” JSPL said.
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Source: Financial Express