MUMBAI Jan 28 JSW Steel Ltd, India's
No.3 steelmaker, posted a lower-than-expected quarterly net
profit as higher raw material costs due to shortage of iron ore
supplies, and foreign exchange losses hurt growth.
The company, in which Japanese steelmaker JFE Holdings Inc
owns a 15 percent stake, reported net profit of 1.37
billion rupees ($26 million) on standalone basis for the fiscal
third quarter ended December, down 18 percent from a year
Net sales rose 5 percent from a year earlier to 82.75
billion rupees. The company did not immediately disclose
consolidated results, that include numbers from its subsidiary
Analysts had expected JSW Steel to post a standalone net
profit of 3.1 billion rupees, according to Thomson Reuters data.
The steelmaker blamed the lower profits on shortage of ore
supplies and said profits were also dragged down after
exceptional charges, including a 2.7 billion-rupee foreign
exchange loss due to a weak rupee, and another 600 million
rupees write-down on its investment in a U.S. plate mill.
Production at JSW Steel's 10-million-tonne Vijayanagar plant
in the southern state of Karnataka has been affected since
August 2011 after India's top court put a ban on mining in the
state due to illegalities in some mines.
JSW, which buys its entire iron ore requirement locally, has
been forced to pay higher prices for the key raw material at
e-auctions sanctioned by India's top court.
Indian steel demand has been growing at near double-digits
over the past few years, pushing local firms to boost capacity
and drawing global steelmakers, but consumption has slowed in
recent quarters as economic growth in the country eases.
Globally, steelmakers are struggling with the debt crisis in
Europe, weak growth in Japan and a slower pace of expansion in
China, the world's largest producer and consumer.
Shares in JSW Steel, valued at $3.6 billion, closed 0.7
percent higher in a flat Mumbai market.
($1 = 53.69 rupees)
(Reporting by Prashant Mehra; Editing by Matt Driskill and