Steel Authority of India Limited (SAIL) has achieved best-ever first quarter (Q1) financial performance during April-June 2007. SAIL's unaudited financial results for the first quarter of 2007-08, taken on record by the company's Board of Directors here today, showed highest-ever Q1 profit before tax (PBT) of Rs. 2308.98 crore, a 10% increase over the corresponding period last year (CPLY). The company's Q1 profit after tax (PAT) also grew 10% over CPLY and was the best-ever for the quarter at Rs. 1525.12 crore. SAIL achieved a turnover of Rs. 8898.45 crore, which was 5.8% higher than CPLY and also the highest recorded in any Q1.
The company has recorded best-ever first quarter performance through its continued emphasis on production of value-added steel, improvement in techno-economic parameters, together with several cost reduction measures such as 150% increase in coal production from captive collieries. The company also stepped up captive production of iron ore and fluxes to match the higher hot metal production in Q1. Prudent financial management and 28% higher e-sales and e–procurement at Rs. 740 crore also helped SAIL in improving its bottom-line.
SAIL achieved record production of 3.8 million tonnes (MT) of hot metal and 3.4 MT of crude steel during Q1 with capacity utilisation of blast furnaces going up to 110%. In regard to techno-economic parameters, improved blast furnace productivity, higher production through continuous casting route, reduction in coke rate, etc., were achieved during the quarter. Major capital repairs were undertaken in the Hot Strip Mills at Bokaro and Rourkela Steel Plants along with annual maintenance shutdowns of other critical finishing mills in the first quarter. In spite of this, the SAIL plants could operate facilities at 108% of capacity to produce 3 MT of saleable steel.
Thrust was continued to reorient the company's product-mix for more value-added products and increasing the share of special steels. The SAIL plants produced more than 0.8 MT of value-added products in Q1, recording a growth of 20% over CPLY. Substantial growth was achieved in production of railway wheels & axles (53%), CRNO steel for electrical equipment industry (14%), wires & rods (16%), etc. This thrust is continuing and the company expects to substantially increase the share of value-added products progressively in its product-mix prospects.
During April-June 2007, SAIL achieved best-ever Q1 sales of 2.5 MT with substantial growth in sales of products like TMT bars (60%), medium structurals (47%), electrical sheets (15%), etc. Exports during the quarter were also higher by 11%.
SAIL could reduce its overall borrowings by Rs. 833 crore during the quarter, bringing down its total debt exposure to Rs. 3347 crore. This improved the company's debt-equity ratio to 0.18:1 as on 30.6.07 as compared to 0.24:1 on 31.3.07. There was a saving of 15% in the company's interest outgo as well.
During the quarter some major production units were commissioned - Blast Furnace # 7 at Bhilai Steel Plant (BSP), Coke Oven Battery at Rourkela Steel Plant (RSP), Bloom Caster at Durgapur Steel Plant (DSP), etc. In-principle approval was given for modernisation & expansion of BSP and RSP involving an estimated outlay of over Rs. 19,000 crore.
A proposal for modernisation of DSP is also receiving in-principle approval from the SAIL board today. The plan envisages the plant's hot metal production capacity to go up to 3.5 MT, with wheel & axle production slated to increase post-modernisation DSP's share of finished steel to 100% from the current level of about 40%.
With a view to secure availability of critical raw materials like coal and iron ore, progress has been made for getting necessary statutory clearances for development of the Rowghat Iron Ore Mines for Bhilai Steel Plant. A coking coal block at Sitanala with reserves of over 100 MT was allotted to SAIL and developmental activities were initiated during Q1.
Responding to performance, SAIL Chairman Mr. S.K. Roongta said: "The company is ensuring full exploitation of its existing potential for a sustained growth and thrust will continue on implementation of modernisation & expansion plans."