OREANDA-NEWS. JSW Steel Limited ("JSW Steel" or the "Company") reported its results for the Fourth Quarter ended March31, 2014("4QFY14" or the "Quarter").These results are reported after giving effect to the Scheme of Amalgamation and Arrangement ("the Scheme") between the Company and JSW ISPAT Steel Limited and others, which became effective June 1, 2013 with appointed date of July 1, 2012. The figures for the corresponding period are not strictly comparable with that of the current quarter as the effect of implementation of the Scheme is included in the current quarter figures.

During the quarter, the Company achieved crude steel production (3.15miNiontonnes, 49% growth YoY), the highest ever consolidated Gross Turnover of 15,242 crores, consolidated Exports of

0.87milliontonnesand the highest ever consolidated EBIDTA of 2,529 crores. Despitea challenging operating environment marked by muted domestic demand growth, the Company achieved 101% of its production and 103% of sales volume guidance for FY14.

Operational Performance:

During the quarter, the Company reported total Crude Steel production of 3.15million tonnes while Saleable Steel sales volume stood at 3.10million tonnes. The details of production and sales volumes are as under:

Particulars

(Million tonnes)

4QFY14

YoY Growth

FY14

YoY Growth

Production: Crude Steel

3.15

49%

12.17

43%

Sales:

 　 　 　 　

- Rolled: Flat

2.47

29%

9.71

41%

- Rolled: Long

0.50

2%

1.81

6%

- Semis

0.13

590%

0.34

32%

Total Saleable Steel

3.10

28%

11.86

34%

Standalone Financial Performance:

JSW Steel recorded its highest ever quarterly Gross Turnover of 13,330crores for the quarter,

Posting a growth of 32% on YoY basis. The Company reported an Operating EBITDA of 2,496crores

and a Net profit after Tax of 802crores for the quarter. The operating EBIDTA margin improved to 20 % vis-a-vis 18.3% marked by several productivity and cost improvement measures initiated by the company.

Gross Turnover and Net Sales for the financial year ended March 31, 2014stood at 48,527 crores and 44,529crores respectively, registering a growth of 25% and 26% on YoY basis. The Operating EBITDA for the financial year was 8,783crores, up by 39%on YoY basis. The company posted a Net profit of 1,335crores for the financial year.

The net gearing as on March31, 2014stood at 1.10x(as against 1.12x as on December31, 2013) and Net debt to EBIDTA stood at 3.03x (as against 3.23x as on December 31, 2013).

Subsidiaries performance: JSW Steel Coated Products:

During the quarter, JSW Steel Coated Products registered a production of Galvanised / Galvalume products of 0.43million tonnes and sales of 0.44million tonnes. The Gross Turnover and Net Sales

for the quarter stood at 2,735crores and 2589crores, respectively. It recorded an Operating EBITDA of 94crores for the quarter.

A new 6-hi Cold Rolling Mill of 0.22 MTPA capacity at Kalmeshwarwas commissioned during 4QFY14.

Chile Ironore Mines:

The Iron ore mines in Chile produced 0.24 million tonnes and shipped 0.15million tonnes of Iron ore concentrate during the quarter. The Company earned an Operating EBITDA of USD 1.32 million for the quarter.

US Plate and Pipe Mill:

The US based Plate and Pipe Mill facility produced 0.11million net tonnes1 of Plates and 0.016 million net tonnes of Pipes, reporting a capacity utilization of 44% and 11%, respectively, during 4QFY14. Sales volumes for the quarter stood at 0.095million net tonnes of Plates and 0.016million net tonnes of Pipes. The Company posted negative EBIDTA of USD 4.00 million for the quarter.

Consolidated Financial Performance:

JSW Steel recorded highest ever quarterly Gross Sales of 15,242crores for the quarter, registering a growth of 43% YoY. Gross sales for the FY 2013-14 stood at 54,621crores recording a growth of 32% over the previous year. The Operating EBITDA for FY 2013-14stood at 9,165 crores.

The net gearing at consolidated level is 1.54xas on March 31, 2014 (as against 1.49x at the end of December 31, 2013), Net debt to EBIDTA at consolidated level is 3.71x (as against 3.74x at the end of December 31, 2013) and the weighted average interest cost of debt was at 8.20% (vis-а-vis 8.03% as on December 31, 2013).

Projects Update:

During the quarter, the Company has commissioned the Continuous Galvanising line (CGL) of 0.40MTPA,which is part of phase 1 of CRM2 Project at Vijayanagar worksand the Pellet Pant &Coke oven plant at Dolvi works. In April 2014, the company has commissioned the Continuous Annealing Line (CAL) of 0.95MTPA at CRM-2, Vijayanagar Works.

The implementation of other ongoing projects like,2nd CALof 0.95 MTPA at CRM-2, Electrical Steel complex, SMS-3 and 2nd Bar Mill at Vijayanagar Worksare in progress and is likely to complete as per schedule.

Key Development:

With a strategic goal to enhance market share in value added products, JSW Steel has invested in Tinplate business by acquiring50% equity shares of Vallabh Tinplate Private Limited (VTPL). VTPL has 60,000 MT per annum Tin plate manufacturing capacity and is located at Village Rajpura, District Patiala of Punjab.

New Projects:

The company has received necessary approvals to take up brownfield expansion at the Dolvi plant to enhance capacity from 3.3 MTPA to 5 MTPA. The estimated cost of the expansion project is

3,300 crores to be financed in the Debt Equity ratio of 2:1. The project will be commissioned by 30th September 2015. The proposed expansion includes setting up a Sinter Plant, Blast Furnace modification, de-bottlenecking of SMS & HSM, Billet caster and 1.4 MTPA Bar Mill.

Besides, the company intends to modernize BF-1 at Vijayanagar to increase Hot Metal capacity from 0.9 MTPA to 1.7 MTPA at an estimated cost of 720 crores, subject to necessary approvals.

The Brownfield expansions are being undertaken at a specific investment cost of less than 20,000/-per tonne of installed capacity.

Dividend:

Considering the Company's performance and financial position for the year under review, the Board, subject to the approval of the Members at the ensuing Annual General Meeting, has

recommended a dividend of 1 per share on 27,90,34,907 10% Cumulative Redeemable Preference Shares (CRPS) of N 10 each, for the year ended March 31, 2014.

The Board has, further, recommended dividend at 11per equity share on the 24,17,22,044 equity shares of 10 each for the year ended March 31, 2014, subject to the approval of the Members at the ensuing Annual General Meeting.

The total outflow on account of equity dividend including corporate tax on dividend will be 311.08Crores, vis-а-vis 282.80 Crores paid for FY13.

Guidance

During the financial year ended March 31, 2014, the company has commenced Pellet Plant and Coke Oven Plant at Dolvi and downstream facilities for value addition, which are expected to stabilise and ramp-up during FY 2014-15. With an enriched product-mix, the Company expects to sell more volumes in the domestic market.

Outlook:

World economy is projected to grow at 3.6% in CY 2014 up from 3% in CY 2013 majorly influenced by expansion in output to be led by Advanced Markets with a continued recovery in Europe from 0.2% to 1.6% and US from 1.9% to 2.8% in CY 2013 and CY 2014, respectively. Japan is expected to continue monetary easing to improve inflation and Industrial growth. Emerging Markets are projected to exhibit a moderate growth at 4.9% in CY 2014 vs. 4.7% in CY 2013. China's increasing focus on "Quality" engineered growth is expected to moderate its investment-stimulated growth from 7.7% in CY 2013 to 7-7.5%. However, downside risks to growth trajectory arise from ongoing tapering of quantitative easing in the US posing a threat of interest rate hike and reversal of investment flow from Emerging Markets, diverging challenges of inflation between Advanced Markets and Emerging Markets along with rising corporate leverage and elevated debts in the Advanced Markets.

For India, FY 2014 has proven to be one of the toughest times especially with high inflation, elevated policy rates, depreciating Rupee with high volatility, rising NPAs, declining manufacturing, stagnant investments coupled with a near stall to policy-initiatives. All these have pushed the country into an economic slowdown for the second-year in succession with adverse downside risk to economic growth projected at 4.9% as against 4.5% in FY 2013. However, prudent and timely measures by the RBI and the Government successfully stabilised and reversed the decline in Rupee to some extent, replenished Foreign Exchange Reserves, significanlty improved Current Account Deficit and contained Fiscal Deficit.

A stable and new Government in the centre will have a sizeable task to over-ride the structural impediments, garner business confidence and restructure fiscal space to support investment for securing and sustaining economic growth recovery. Increasing risk to agriculture growth, due to drought from perceived threat of El Nino, remains an anonymous challenge. Moreover, administering a moderate economic growth projected between 5-6% during FY15 and simultaneously ensuring the momentum of disinflation remains the major challenge. However, global commodity prices, as estimated to remain moderate, could support the recovery process of Indian economy.