Mumbai, May 5 (PTI): Rising raw material costs have resulted in a 3 per cent decline in JSW Steel’s earnings before interest, taxes, depreciation and amortisation (EBIDTA) margins for the year ended March 31, 2008, and the trend is likely to continue for the current year, vice-chairman and managing director Sajjan Jindal said.

“The company could not maintain its margins in spite of impressive growth in volume and higher realisation as the cost of production has gone up by 16 per cent,” Jindal said.

“This led to a drop of 2.66 per cent in the EBIDTA margin which stood at 30.93 per cent for the year ended March 2008,” he added.

Riding on a 27 per cent rise in the volume of saleable steel at 5.5 million tonnes, net sales of the company went up to Rs 11,420 crore for the year ended March 31, 2008, up 33 per cent over the previous year.

“The unprecedented rise in input cost such as iron ore by 68 per cent and coke by 66 per cent has exerted tremendous pressure on the EBIDTA margins of the company,” he said.

Jindal, however, said that the company had taken up a three-pronged strategy to improve margins — growth in volume, improve product mix and increase efficiency in operation. JSW has already inked a long-term contract for its total coal requirement, but has to depend on the spot market for half of its iron ore requirement for the year.

Jindal, however, maintained that the company would not go for any price hike in the coming few months “to assist the government in checking inflation.”

JSW Steel’s standalone net profit for the quarter ended March 31 was Rs 461 crore against Rs 413.25 crore in the corresponding period of the previous fiscal.

Total income of the company rose to Rs 4,225.97 crore for the quarter from Rs 2,579.27 crore in the year-ago period.

The board of directors has declared a dividend of Rs 14 on every share of Rs 10 for the financial year 2007-08.