India’s JSW Steel reported revenue growth of 31% YoY to INR 380.9bn ($4.8bn) for the quarter ended June. However, its net profits were lower by 85% to INR 8.4bn ($110mn) on the back of higher raw material costs rising 2.5x YoY to INR 256bn ($3.2bn) and power & fuel costs surging 2.2x to INR 4.4bn ($55mn). EBITDA fell on account of lower sales volume, one-off items such as NRV (Net Realisable Value) provisions, payment of export duties, and FX loan translation losses. During the quarter, crude steel production was 5.77mn tonnes and sales reached 4.49mn tonnes. JSW Steel’s exports fell 27% YoY and 35% QoQ because of falling prices globally and the imposition of a 15% export duty by the government in May 2022. The Company’s Net Debt to EBITDA stood at 2.03x Vs 1.45x at the end of the March quarter. The increase in debt was mainly due to the locking up of working capital in inventory. Capex spending was INR 37bn ($460mn) for the June quarter, and JSW revised down full fiscal capex from INR 200bn ($2.5bn) to INR 150bn ($1.9bn).
JSW Steel’s dollar bonds were slightly higher with its 3.95% 2027s up 0.86 points to 80.34, yielding 6.22%.
Separately, Tata Steel said that it may close sites including Port Talbot unless it receives £1.5bn ($1.8bn) in support from the UK government, Financial Times reported. The company has been in talks with the UK government for two years over funding for the transition to greener steel production. Port Talbot is UK’s biggest steel plant employing 4,000 people.
Tata Steel’s USD 5.43% 2028s were up 0.63 points at 96.72, yielding 4.49%.
