JSPL cuts losses by more than half, at Rs 407 crore
The consolidated net loss of Jindal Steel & Power Ltd for the quarter ended December 31, 2016 shrunk by more than half to Rs 407.44 crore on higher volumes, better price realisations and reduced costs.
The company had posted a net loss of Rs 869.73 crore in the corresponding quarter of the previous financial year (2015-16).
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Total Income increased to Rs 5,407.87 crore for the quarter ended December 31, 2016, as compared to Rs 4,336.05 crore in the same period, last financial year.
“We made an effort to cut our conversion and material costs, and also reduced our overheads," Ravi Uppal, Managing Director & Group CEO JSPL told Business Standard.
In the last few months, the company has divested some of its assets to pare debt.
JSPL’s debt stands at about Rs 45,000 crore, including over Rs 26,000 crore in its steel business which has been reduced by Rs 2,000 crore in the period.
Whereas, the power sector’s debt has risen due to increased borrowings for the business, he said.
Steel production rose 18 per cent on-year to 1.15 million tonnes. Pellet production stood at 1.69 million tonnes in Oct-Dec period as against 0.88 million tonnes in the same period, last financial year. External sales for pellet, including both domestic and exports were 0.71 million tonnes.
Depreciation cost rose to over Rs 1,000 crore after the company revalued its assets.
The valuation of our steel, power and mine assets has gone up by Rs 20,000 crore, due to which the depreciation cost has risen in the October-December period, Uppal said.
While the imposition of minimum import price in February 2016 brought cheer to the domestic steel industry and helped reduce the amount of imports, Uppal said that the impact of MIP was mainly felt in the months of February, March and April.
“It wasn’t effective post April because by then the international steel prices had started rising," he added.
The steel company’s total employee cost, which comprises 4.5-5 per cent of the total turnover, rose to Rs 236.79 crore during the period from Rs 156.37 crore, year-on-year.
On a standalone basis, the company posted a net loss of Rs 186.53 crore for the quarter ended December 31, 2016 as compared to net loss of Rs 519.02 crore for the quarter ended December 31, 2015. Total Income has increased to Rs 3518.95 crore for the quarter ended December 31, 2016 from Rs 2918.55 crore for the quarter ended December 31, 2015.