Visa Steel Ltd on Friday reported a 24% drop in net profit for the April-June quarter at Rs 7.63 crore as against Rs 10.06 crore recorded in the corresponding quarter of the last fiscal.
Profit before tax, however, marginally improved from Rs 11.55 crore to Rs 11.61 crore.
During the quarter under review, the company posted total revenues of Rs 222.17 crore, down from Rs 256.87 crore recorded in the first quarter of fiscal 2010.
Visa Steel is setting up a 0.5 million tonnes per annum (tpa) special steel melt shop, 0.5 million tpa special steel bar & wire rod mill and additional 25 mw power plant.
“The company is planning to integrate backwards into mining of iron ore, chrome ore and coal,” it said.
Vishal Agarwal, Visa Steel managing director, said the demand for iron and steel products has been subdued due to the European debt crisis and Chinese property suppression.
“In addition, the disruption in supplies of iron ore due to closure of OMC’s iron ore mines in Orissa has affected our operational performance.We have, however, maintained a healthy operating margin due to low-cost competitiveness largely due to strategic location, efficient raw materials procurement and captive power generation. With forward integration of steel melt shop and bar & wire rod mill and additional power generation, revenues and profitability are expected to improve further,” he said.
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