SAIL achieves record Q3 turnover of over Rs. 12276 crore
Posts Q3 PAT of Rs. 1107 crore
New Delhi: The unaudited financial results of Steel Authority of India Limited (SAIL) for October-December ’10 (Q3) of the current financial year, taken on record by the company’s Board of Directors here today, mirrored the market conditions in which the steel industry is operating. On the one hand is slowly firming up demand leading to record sales, while on the other a sharp hike in cost of inputs has exerted substantial pressure on margins. The SAIL Board has approved interim dividend for its shareholders at 12% of the company’s paid-up capital amounting to Rs. 495.65 crore.
With a record gross sales turnover in Q3 of Rs. 12,276.81 crore, a growth of 17.5% over the corresponding period last year (CPLY), SAIL’s turnover for the first nine months of FY ’11 was Rs. 33,905.40 crore, 9.6% higher than CPLY of FY ’10. In the first nine months of FY ’11, SAIL’s net worth grew by Rs. 2,798 crore to Rs. 36,115 crore as on 31st December ’10. During the same period, the company’s debt-equity ratio came down from 0.50:1 to 0.39:1 as a result of better debt servicing. The company’s market borrowings came down to around Rs. 14,176 crore on 31.12.10 from a level of Rs. 16, 511 crore on 31.3.10.
Reflecting the sharp increase in prices of raw materials, particularly imported metallurgical coal, SAIL’s Q3 profit before tax (PBT) and profit after tax (PAT) at Rs. 1,628.20 crore and Rs. 1,107.47 crore were, however, respectively 35.8% and 33.9% lower than CPLY. The company’s PBT and PAT during the April-December ’10 period were recorded at Rs. 4,969.41 crore and Rs. 3,374.13 crore, lower by 29.7% and 27.7%, respectively, over CPLY. The extent of the increase in coal prices can be gauged from the fact that, in Q3, its adverse impact over CPLY was Rs. 1,093 crore in comparison to Rs. 368 crore in Q1 and Rs. 939 crore in Q2.
To obtain economies of scale to partially neutralize the effect of the cost push, the SAIL plants stepped up production and achieved highest-ever Q3 hot metal production at over 3.96 million tonnes (MT), 12% higher than Q2 and 4% more than CPLY. Production of crude steel at around 3.7 MT was 13% and 4% higher than Q2 and CPLY, respectively. Saleable steel production at 3.33 MT also grew 8% over Q2 and 5% over CPLY. The Q3 performance helped SAIL to achieve production growth of 2% in hot metal at 11.14 MT, 1% in crude steel at 10.24 MT and 1% in saleable steel at 9.46 MT over CPLY in April-December ’10. The company achieved best-ever Q3 output through the energy-efficient continuous casting route at around 2.5 MT, taking concast production in the first nine months to a record 6.91 MT.
Better product-mix saw highest-ever Q3 production of special steels/value-added products of nearly 1.2 MT, a growth of 6% over previous best of 1.1 MT in CPLY, contributing to a record 3.52 MT of these items being produced by the SAIL plants during April-December ’10. Growth over CPLY was recorded in production of value-added items such as railway wheels & axles (24%), wire rods (5%), rounds & bars (16%), plates (3%), etc., in the first three quarters.
Record Q3 sales of over 3.25 MT, showing a growth of 10.7% over CPLY, was substantially aided by 7.2% higher sales of higher value items at over 1.2 MT. Prominent among these were railway materials (35% growth), heavy structurals (10.8%), thick plates (11%), CR sheets (31%), galvanized products (15.8%), pipes (48.9%), etc.
With momentum of implementation of SAIL’s modernization & expansion plan continuing as per schedule, the company incurred capital expenditure of Rs. 2,688 crore during Q3, taking total outgo on this account so far to Rs. 8,002 crore in FY ’11. Schemes completed during Q3 included installation of guillotine shear in Plate Mill of Bhilai Steel Plant, coal dust injection system in Blast Furnaces 2 & 3 at Bokaro Steel Plant and a 700 tpd Oxygen Plant at Rourkela Steel Plant, among others.
Reviewing the Q3 performance, SAIL Chairman Mr. C.S. Verma said: “There has been an uptrend in sales and profit compared to the preceding quarter, despite a higher cost push. I am confident that our SAIL team will leave no stone unturned to face all challenges to maintain this improving trend.”
Steel Authority of India Limited (the "Company") is proposing, subject to market conditions and other considerations, to make a further public offering of its equity shares in the near future and is in the process of filing a red herring prospectus with the Securities and Exchange Board of India and the Registrar of Companies, National Capital Territory of Delhi and Haryana, India. This material is not an offer of securities for sale in the United States or elsewhere. This release is not to be released in the United States, Australia, Canada or Japan. The shares of the Company are not being registered under the Securities Act of 1933, as amended (the “U.S. Securities Act”) and may not be offered or sold in the United States unless registered under the U.S. Securites Act or pursuant to an exemption from such registration. There will be no public offering of the shares of the Company in the United States
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