Higher tax expenses weighed on the June quarter earnings of Jindal Steel and Power Ltd even as the steel-maker saw an improvement in sales and profitability compared to the previous year.
Consolidated sales volume for the quarter was 2.09 million tonnes, up nearly 14% on year, while production remained flat at 2.05 million tonnes, both on a year-on-year and sequential basis.
The alloy manufacturer’s consolidated net profit slipped by a little over a fifth on year to Rs 1,338 crore during the quarter from Rs 1,692 crore a year ago. The company’s tax expenses were at 521.13 crore, up nearly seven times from Rs 74.75 crore a year ago.
The consumption of finished steel in India rose 12% year-on-year to 35.2 million tonnes in Apr-Jun driven by strong domestic demand, the company said in its investor presentation. Imports, though, surged by 32% in the same period.
“Higher imports from China and FTA countries kept flat product prices in check in the domestic markets,” the company said.
Higher sales volume and a higher share of value-added products, though, helped the company’s consolidated gross revenue rise 9% on year to Rs 15,788 crore. Adjusted operating profit for the quarter rose 5% on year to Rs 2,831 crore.
The company’s adjusted operating profit on each tonne of steel sold also rose to Rs 13,527 from Rs 12,696 rupees a year ago.
Jindal Steel spent Rs 2,796 crore on capital expenditure during the quarter, largely on capacity expansion in India. The company will have a production capacity of 12.9 million tonnes of crude steel by the end of this year, and plans to expand this to 15.9 million tonnes by the next fiscal.
It has outlined a total capital expenditure of Rs 31,000 crore which includes the existing capex at Angul, coal mines and some new projects.
The company’s consolidated net debt reduced to Rs 10,462 crore as on Jun-end from Rs 11,203 crore as on Mar-end, helped by some repayments. Its net debt to operating profit ratio also improved to 1.0 times from 1.10 times a quarter ago.