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SAIL Achieves Record Turnover in Fiscal Third Quarter
01/17/2011 - The Steel Authority of India Limited reported record gross sales turnover of Rs. 12,276.81 crore for its fiscal third quarter ended December 31, a growth of 17.5% over the corresponding period last year. 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.
The Steel Authority of India Limited (SAIL) reported unaudited financial results for October-December 2010 (Q3) of the current financial year, including a record gross sales turnover 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.
As noted by the company, results reflect the market conditions in which the steel industry is operating, including a slow firming of demand which is leading to record sales, offset by a sharp hike in cost of inputs that is exerting substantial pressure on margins.
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 in the year-ago third quarter. For the fiscal year to date (April-December ’10), the company recorded profit of Rs. 4,969.41 crore before tax and Rs. 3,374.13 crore after tax, lower by 29.7% and 27.7%, respectively, compared to the comparable year-ago period. The extent of the increase in coal prices can be gauged from the fact that, in Q3, its adverse impact in the comparable year-ago period 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, 12% higher than Q2 and 4% more than last year’s fiscal third quarter. Production of crude steel at around 3.7 million tonnes was 13% higher than Q2 and 4% higher than the comparable year-ago period. Saleable steel production at 3.33 million tonnes also grew 8% over Q2 and 5% over the year-ago third quarter.
SAIL’s Q3 performance helped the company to achieve fiscal year-to-date production growth of 2% in hot metal (11.14 million tonnes), 1% in crude steel (10.24 million tonnes) and 1% in saleable steel (9.46 million tonnes). The company achieved best-ever Q3 output through the energy-efficient continuous casting route at around 2.5 million tonnes, taking continuously cast production in the first nine months to a record 6.91 million tonnes.
Better product-mix saw highest-ever Q3 production of special steels/value-added products of nearly 1.2 million tonnes, a growth of 6% over previous best of 1.1 million tonnes in the year-ago third quarter, contributing to a record 3.52 million tonnes of these items being produced by the SAIL plants during the fiscal year to date. Growth over the comparable year-ago period 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 million tonnes, showing a growth of 10.7% over the year-ago third quarter, was substantially aided by 7.2% higher sales of higher value items at over 1.2 million tonnes. Prominent among these were railway materials (35% growth), heavy structurals (+10.8%), thick plates (+11%), cold rolled sheets (+31%), galvanized products (+15.8%), and pipes (+48.9%).
With the 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 a guillotine shear in the Bhilai Steel Plant Plate Mill, a coal dust injection system in Bokaro Steel Plant’s Blast Furnaces 2 & 3, and a 700 tonnes/day 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.”
The SAIL Board approved an interim dividend for its shareholders at 12% of the company’s paid-up capital, which amounts to Rs. 495.65 crore.
