New Delhi: Hit hard by rising interest burden and lower sales realisations, Jindal Steel and Power's (JSPL) consolidated net profit fell by nearly 35 per cent to Rs 760.27 crore for the quarter ended March 31, 2013. The company, headed by Naveen Jindal, had reported a net profit of Rs 1,167 crore in same quarter of FY'12. Net sales during the fourth quarter of 2012-13 reported a meagre growth of 2.16 per cent at Rs 5,583.33 crore. The company had reported a net sales of Rs 5,465.26 crore in the January-March quarter of 2011-12.
JSPL is also looking to double the capacity of both of its businesses -- steel and power -- during the current fiscal, company's Managing Director Ravi Uppal told reporters in Delhi. The company is looking to increase its steel making capacity to 7 million tonnes per annum (MTPA) by adding 2 MT capacity at Odisha's Angul and another 2 MT capacity in Oman by September-October 2013, he said.
It is also planning to commission all four units of its upcoming 2,400 MW power plant in Chhattisgarh by the end of current fiscal, Uppal said, adding that after that, JSPL's power production capacity will go up to 4,969 MW. While the gross revenue from steel went up nearly 10 per cent to Rs 4,840.63 crore, realisations from power were down nearly 12 per cent to Rs 1,130 crore in March quarter.
The company had reported a net sales of Rs 5,465.26 crore in the January-March quarter of 2011-12.
Its realisations from power business came down to Rs 3.17 per unit during the just concluded quarter as against Rs 4 per unit of Q4 of FY'12. Average realisation from steel was Rs 35,000 per tonne in the period. Moreover, company's interest burden during Q4 rose by over 85 per cent to Rs 238.73 crore and affected profitability. Consolidated borrowings stand at over Rs 23,000 crore.
"It's a combination of various factors...In Q4 of FY'12, steel prices were almost at their peak. At Q4 of FY'13, prices have fallen dramatically....There is a good opportunity for prices to reach once again to the level that we have 6 to 9 months ago," Uppal said. Noting that Indian economy is going through challenging times, JSPL's Deputy Managing Director Sushil Maroo said that company is hopeful of a much better results in the coming months, when the new capacities, both in steel and power, businesses will be commissioned.
In terms of production, the city-based company reported a 4 per cent increase in both, steel and power at 0.79 MT and 1,477 million kWh. Maroo also said that company's production and sales are rising and a little improvement in business environment will push JSPL's bottomline (profit) upwards.
According to the company, it has started full scale production of both coking and thermal coal at its mine in Mozambique and is expecting to receive the first shipment of 50,000 tonnes during the current quarter. The company is looking at producing 0.5 MT coal from the Mozambique mine in the first year. Shares of JSPL today fell 0.03 per cent to close at Rs 328.80 apiece on the BSE.
For the year ended March 31, 2013, JSPL reported a 26.60 per cent decline in its consolidated net profit at Rs 2,910.11 crore. Its net sales, during the year, grew by 8.08 per cent at Rs 19,553.98 crore. The company has kept a capex of Rs 10,000 crore for the current fiscal, Maroo said, though declined to comment on fund raising plans.
He also said that production of Jindal Power, a subsidiary of JSPL, has also improved and the plants are currently running at 99 per cent plant load factor. Moreover, transmission issues, which had hurt the company during the third quarter of last fiscal, have also been resolved to an extent and the company is looking at improved performance of its power plants.
In the last quarter, ended March 31, 2013, Jindal Power reported a net profit of Rs 282.24 crore, while its income from operations stood at Rs 636.59 crore. For the year ended March, 2013, Jindal Power's profit was at Rs 1,112.97 crore and income from operations was at Rs 2,509.66 crore.