India’s largest domestic steel producer JSW Steel has posted a 20.2 per cent decline in profit after tax in the fourth quarter of the last fiscal, reflecting declining prices, rising costs and an exceptional loss in the US business.

The Sajjan Jindal-led company also announced the merger of JSW Ispat Special Products Ltd (formerly Monnet Ispat Ltd) with itself to simplify group structure and capture operational synergy.

While PAT stood at Rs 3,343 crore in the fourth quarter on a consolidated basis compared with Rs 4,191 crore a year ago, revenue from operations went up 74 per cent to Rs 46,895 crore from Rs 26,934 crore a year ago.

JSW Steel took a hit of Rs 710 crore on account of a USA subsidiary following termination of lease in relation to a coking coal mine in the fourth quarter.

Even as the quarterly performance was muted, JSW Steel ended the financial year with the highest ever revenue of Rs 1,46,371 crore, up 83 per cent year-on-year, and and a net profit of Rs 20,938 crore, up 166 per cent. It announced a dividend of Rs 17.35 a share for FY2022.

Domestic sales during the fourth quarter stood at 5.13 million tonnes (mt) , up 26 per cent year-on-year, as the 5 mt expansion of the Dolvi plant in Maharashtra allowed the company to bring additional volume to the market.

While 79 per cent of the sales were made to the domestic market, 21 per cent went to exports. For the full year, exports accounted for 28 per cent of 16.34 mt sales. In the Q4, the company’s performance was impacted by a dip in the prices and higher coking coal cost.

For the ongoing fiscal, JSW Steel has announced a guidance of 24.3 mt steel production and 23.3 mt sales, even as the Modi government slapped an export duty of 15 per cent from May 22, rendering a major part of the export uncompetitive.

The government move did not cover semi-finished steel such as billet which can still be exported without attractive duty. However, the margin on the semi finished products will be less than finished steel (hot rolled and cold rolled coil) export. The company also guided that it would continue to carry out the ongoing expansions at Vijaynagar and Bhushan Power & Steel Ltd.

Merger plans

Four years after acquiring Monnet from the insolvency court, JSW Steel will merge the company with itself through a share swap deal. AION Investment, JSW’s private equity partner in the acquisition, and a promoter shareholder in JISPL, will get 0.7 per cent stake in JSW Steel, as part of the arrangement.