JSW Steel Q3 net down 26% at Rs 382 crore

Mumbai, Jan 27 (PTI) Sajjan Jindal-led JSW Steel todaysaid it has posted a 25.65 per cent drop in net profit at Rs382.3 crore in Q3 FY 11 as against Rs 514.23 crore in the year-ago period due to cost pressures, though sales hit a record.

"We must say Q3 was a good quarter. Despite costpressure, we have posted a profit. We hope the next quarterwill be good for us," JSW Steel Joint Managing Director andGroup CFO Seshagiri Rao told reporters here.

The steel major clocked its highest-ever quarterlysales during the quarter at 1.593-million tonnes on the backof an enhanced production at its Vijayanagar facility.

Though the company''s production increased by 11 percent at 1.636-million tonnes over the corresponding quarter,its expenses on raw material and fuel went up by more than 38per cent to Rs 3,898.79 crore from 2,818.82 crore a year-ago.

Net sales increased by 26 per cent at Rs 5,771.42crore in the October-December quarter from Rs 4,587.66 crorein the same period last year, on enhanced production andbetter product-mix.

"We expect to produce 1.7-million tonnes of steelduring January-March (2011) as against 1.64 million tonnes inthe December quarter," Rao said.

The company expects to increase its coking coalproduction to 7 million tonnes in FY 12, he said. "Our annualcoking coal requirement is under 5-million tonnes and weexpect to increase it to 7 million tonnes in FY 12."

The steel firm plans to set up a new 2.3-million tonnecold-rolling mill complex at Vijayanagar in Karnataka at aninvestment of Rs 4,025 crore. .

"We will set up a new 2.3-million tonne cold-rolling mill complex at Vijayanagar at an investment of Rs 4,025crore. This complex will come up in two phases and will becompleted by Q1 2014," Rao said.

The funding will have a debt equity ratio of 2:1.

Total internal accruals and debt will be Rs 1,350 crore and Rs2,675 crore, respectively, he said.

On the ongoing 3.2 MTPA expansion project atVijayanagar, he said work is progressing at full swing toexpand the overall crude steel capacity to 11 MTPA by March2011.

On price increase of its products, the company''sDirector (Commercial and Marketing), Jayant Acharya, said,"We have not decided anything yet. We will take a call at anappropriate time."

"Steel demand will continue to increase in theJanuary-March quarter," Acharya said.