Steel Authority of India Limited (SAIL) achieved a record third-quarter net profit (after tax) of Rs. 1,935 crore in October-December 2007. This was 32% higher than the net profit of Rs. 1,471 crore achieved during the corresponding period last year (CPLY). With the company's sales turnover increasing by 11.4% over CPLY to Rs. 10,756 crore in Q3 of 2007-08, SAIL's profit before tax (PBT) at Rs. 2,922 crore was also the highest achieved in any third quarter, rising 31% over Rs. 2,234 crore in CPLY. The unaudited financial results of the company were taken on record by the SAIL Board of Directors at a meeting held here this morning.
The company's profitability during Q3 grew mainly due to improvement in its product-mix, substantial increase in production of special grade steel and value-added items, higher net sales realisation and special efforts towards cost reduction, in spite of sharp increase in cost of inputs such as ferro-alloys, additives like zinc, copper, etc., and spares, as well as much higher employee remunerations.
At the meeting, the SAIL Board announced an interim dividend for the company's shareholders for the fourth consecutive year, this time at an enhanced rate of 19%, which amounts to Rs. 784.78 crore. This is the highest-ever interim dividend paid by the company so far. SAIL had paid interim dividend at the rate of 16% last year.
Maintaining progressive increase in its profitability during each quarter of the current financial year, SAIL registered its highest profit after tax of Rs. 5,160 crore for the April-December period with a growth of 20% over CPLY. SAIL also recorded its highest first nine-month turnover at Rs. 30,026 crore, an increase of 9% over CPLY.
SAIL achieved record production of 11.3 million tonnes of hot metal, 10.4 million tonnes of crude steel and 9.6 million tonnes of saleable steel during the first nine months of the current financial year. Around 3.7 lakh tonnes of additional finished steel were produced during the period from existing mills by maximising capacity utilisation, reducing production of semis, and thereby improving the share of finished steel to 84% from 81%.
SAIL plants operated at an average capacity utilisation of 121% during Q3 of 2007-08 against 112% achieved in CPLY, and produced a record 3.4 million tonnes of saleable steel. For the first time in a quarter, production of special steels and value-added items crossed the 1 million tonne mark, recording a growth of 30%. Substantial growth was recorded in products like high corrosion resistant TMT bars for coastal areas (326%), LPG grade steel (24%), TMT bars (32%), plates (18%), medium structurals (11%), 90 UTS rails (13%), wheels & axles (6%), CRNO (5%), etc. SAIL also achieved record domestic sales of 3 million tonnes during Q3.
Continued improvement in major techno-economic parameters contributed significantly towards the performance. The important of these include reduction in coke rate by 1% at 526 kg, energy consumption by 3% at 6.68 giga calories, increase in production through the energy-efficient CC route by 10%. Besides, higher yield, lower arisings/defectives, better operational parameters, reduction in use of consumables, inputs, power, etc., resulted in cost savings of about Rs. 135 crore in Q3. Production by SAIL's captive collieries increased by 30% in Q3.
Borrowings were further reduced by Rs. 412 crore in Q3 to Rs. 2,792 crore as on 31st December 2007. With this, SAIL's debt-equity ratio came down to the lowest-ever level of 0.13:1 at the end of the third quarter.
The company achieved highest-ever labour productivity of 224 tonnes/man/year in Q3, up from 195 tonnes/man/year during the same period last year.
The implementation of SAIL's expansion and modernisation plan by 2010 has proceeded with the placement of orders for several major packages at IISCO Steel Plant (ISP) and Salem Steel Plant. Projects worth around Rs. 20,000 crore have been sanctioned for implementation during the first nine months of the current financial year. Projects commissioned during the quarter included rebuilding of Blast Furnace#2 at ISP and installation of HCL regeneration plant for PL-II of Bokaro Steel Plant's Cold Rolling Mill.
SAIL has taken several strategic initiatives in recent months, some of which are: signing of an MoU with Tata Steel for development of coal mines, setting up Special Economic Zone at Salem, MoU with Railways for construction of 235-km new tracks in Dalli-Rajhara, Chhattisgarh, formation of joint venture company for cement plant at Bokaro, starting of processing units in different states and expanding the company's marketing network by appointing dealers in all districts of the country.
During the third quarter of the current financial year, SAIL won a number of awards and accolades, including the prestigious Gold Trophy of the 'SCOPE Award for Excellence and Outstanding Contributions to the Public Sector Management' for the year 2006-07 and India's Employer of Choice-2007 award instituted by CNBC-TV18 in the PSU category, as well as four Golden Peacock awards instituted by the Institute of Directors in various categories for excellence in performance.
Announcing the results, SAIL Chairman Mr. S.K. Roongta said: "We will continue to emphasise on achieving sustained growth on the strength of internal initiatives and improvements."