Indian steelmaker Jindal Steel and Power Ltd (JSPL) has issued its consolidated financial results for the second quarter ended September 30 of the financial year 2019-20.
In the three months in question, JSPL registered a net loss of INR 3.99 billion ($56.24 million) compared to a net income of INR 2.79 billion in the same period of the previous financial year. JSPL’s turnover decreased by 10.5 percent to INR 89.39 billion ($1.26 billion), while its EBITDA fell by 25.6 percent to INR 16.42 billion ($231.49 million), both compared to the same period of the previous year.
The company’s crude steel production in the second quarter amounted to 1.84 million mt, up 10.2 percent, while its steel sales decreased by 2.8 percent to 1.7 million mt, both on year-on-year basis.
JSPL commented, “Though the quarter was due to be the weakest given the monsoon season, further weakened by the muted economic growth in the country; products like rails, structures, plates and other such value-added products helped the company partially offset the steep fall in prices and profitability during the reported quarter.”
According to the company statement, the World Steel Association expects world steel demand to increase by 1.7 percent in 2020. The company said that the uncertainty in global trade, the timing and amount of government support to economies and the perception of risk in the economies which impacts individual spending patterns are the three main factors that affect steel demand in present times. The company expects the outlook for all these issues to be better in the next calendar year, as the US and China seem to reach a tentative agreement for all trade issues, and all major countries are supporting their economies with monetary solutions.
Meanwhile, JSPL said that the Indian economy is expected to grow by seven percent in 2020, and, with the measures by the government including cuts in corporate taxation, increased allocation and spending in infrastructure sector, the demand for steel is expected to rise in the second half of FY 2019-20. The company also expects steel consumption to grow in the October-March period due to a pick-up in construction activity.