Reeling from the iron ore shortage and foreign-exchange losses, JSW Steel on Friday posted a 71.5 per cent drop in its second quarter net profit at Rs 127.1 crore as against Rs 445.4 crore year earlier.

The steelmaker’s net sales grew to Rs 7,625.1 crore against Rs 5,712.8 crore in the corresponding quarter last year. Expenditure also grew from Rs 5,116.2 crore to Rs 6,739.9 crore. The company reported a foreign exchange loss of Rs 512.98 crore in the July-September quarter.

Seshagiri Rao, the joint managing director and group CFO, said, “The iron ore supply was severely impacted from July 29. In spite of this, our production volumes went up 11 per cent and sales rose by 19 per cent in the second quarter.” The company commissioned its 3.2 million tonne blast furnace in July, which took its total installed capacity to 11 million tonnes. Rao said that the forex loss of Rs 512.98 crore has been on the account of rupee depreciation (nine per cent) and the higher cost of production (Rs 1,500 per tonne) due the shortage of iron ore.

The company, whose board on Friday appointed Sajjan Jindal as its chairman after his mother Savitri Devi stepped down, has been liquidating its inventories to meet the customer demands. Jayant Acharya, director (sales and marketing), said, “We have 15-20 days of inventory left. This is typically low inventory level as we have been liquidating it in the quarter to meet the obligations.” For more visit: Business Standard

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