JSW Steel cuts production guidance for FY20-21

JSW Steel cuts production guidance for FY20-21

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Major Indian steelmaker JSW Steel (JSW) has announced its financial and operational results for the fourth quarter and the full financial year ended March 31, 2020.

The company said while it is making efforts to gradually ramp up capacity utilization, the domestic demand outlook is expected to remain subdued in the near term as a vast majority of customers across automotive, construction, engineering and capital goods, also will take time to resume operations and increase activity levels. Consequently, the company intends to focus more on the export market in order to improve utilization, generate cash flow and liquidate stocks.

JSW lowered its crude steel production guidance for the next financial year to 16 million and sales guidance to 15 million. In the financial year 2019-20, the company’s crude steel output amounted to 16.06 million mt, down four percent, while its finished steel sales decreased by four percent to 15.08 million mt, both year on year. The company also increased its capacity utilization to 85 percent in May after resuming operations about a month ago, SteelOrbis understands.

In the fourth quarter, JSW Steel posted a net profit of INR 2.42 billion ($31.82 million), down by 86 percent compared to the same quarter of the previous financial year. In the March quarter this year, JSW’s net sales declined by 23.1 percent year on year to INR 152.77 billion ($2 billion) due to lower sales volumes. Lower costs of key raw materials such as iron ore and coking coal helped to partially offset the negative impact on margins.

For the full financial year 2019-20, JSW Steel reported a net profit of INR 52.91 billion ($695.6 million), down by 34.8 percent compared to the previous financial year, while its net sales decreased by 16.7 percent year on year to INR 642.62 billion ($8.45 billion).

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