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JSW Steel Turns Unprofitable After Foreign-Exchange Losses

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Oct. 29 (Bloomberg) -- JSW Steel Ltd., India’s third-biggest producer, turned unprofitable in its second quarter because of a one-time loss.

The loss was 1.15 billion rupees ($19 million) for the three months ended Sept. 30, compared with a profit of 6.9 billion rupees a year earlier, the Mumbai-based company said today in a statement. The median profit of 24 analyst estimates compiled by Bloomberg was 3.49 billion rupees. Sales gained 35 percent to 128 billion rupees. The company had a one-time loss of 8.51 billion rupees.

JSW has been hampered by a shortage of iron ore at its biggest plant in Karnataka that is operating at about 80 percent of capacity. The nation’s top court ordered a ban on mining the key steelmaking ingredient in Karnataka in August 2011 as it probed environmental breaches. The court allowed some mines to restart in September 2011 and capped the state’s output at 30 million tons.

The shares gained as much as 2 percent 875.90 rupees and traded at 864.85 rupees as of 2:29 p.m. in Mumbai. The shares have gained 6.4 percent this year, compared with a 7.5 percent increase in the benchmark S&P BSE Sensex.

The company owned by Sajjan Jindal is considering buying the local assets of Stemcor Holdings Ltd., two people with direct knowledge of the matter said on July 24. Stemcor produces 5 million tons of iron ore a year in the eastern state of Odisha and has reserves of more than 100 million tons.

To contact the reporter on this story: Abhishek Shanker in Mumbai at ashanker1@bloomberg.net

To contact the editor responsible for this story: Jason Rogers at jrogers73@bloomberg.net

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