Steel Authority of India Limited (SAIL) has achieved highest-ever July-September (Q2) net profit of Rs. 1,700.24 crore during the current financial year. This was 18% higher than the net profit achieved in the corresponding period last year (CPLY). This helped the company to achieve highest-ever first-half (H1) net profit of Rs. 3, 225.36 crore, a growth of 14% over CPLY. SAIL's unaudited financial results for July-September of 2007-08 were taken on record by the company's Board of Directors here this morning.
SAIL also recorded highest-ever Q2 turnover of Rs. 10,371.63 crore, showing 8.2% growth over CPLY. With this, the company achieved its highest-ever H1 turnover of Rs. 19,270.08 crore, 7% higher than CPLY. The improvement in financial performance during Q2 of FY '08 was due to higher production of saleable steel, including value-added products, higher sales volume, improvement in major techno-economic parameters, lower interest cost and higher interest earnings.
Record saleable steel production by the SAIL plants at 3.25 million tonnes was 10% higher in Q2 over CPLY. Thrust on stepping up production of value-added items continued and output touched 1 million tonnes, which was 20% higher than CPLY. With this, best-ever capacity utilisation of 117% was also achieved in Q2.
Further improvement in key techno-economic parameters also continued, with reduction of 2% in coke rate and 1% in energy consumption during July-September '07. Production through the continuous casting route went up to 2.13 million tonnes, 6% higher than CPLY. Thrust on production of value-added items resulted in growth in production of electrode quality wire rods (53%), high corrosion-resistant TMT bars for coastal areas (664%), LPG grade steel (38%), SAILCOR (100%), rails (11%), tinplate (59%), etc., during July-September 2007.
Continuing with its policy of giving priority to the needs of the domestic market, SAIL strengthened its distribution network by taking the number of authorised dealers to 1,287 covering all the districts in the country. Sales through dealers increased more than five fold – from 13,000 tonnes in CPLY to 69,000 tonnes in Q2.
With further reduction in the level of borrowings during H1, the company's debt-equity ratio improved to 0.16:1 on 30.9.07, in comparison to 0.24:1 achieved on 31.3.07. The net worth of the company crossed Rs. 20,000 crore as on 30th September '07.
During this quarter, the SAIL Board accorded approvals for investment of over Rs. 15,000 crore for modernisation & expansion schemes of IISCO Steel Plant and Salem Steel Plant. Several new initiatives taken during the quarter include, inter-alia, entering into MoUs with POSCO to form strategic alliance towards synergising the strengths of both companies, with RINL and NMDC for installation of a 4 million tonne per annum integrated steel plant in Chhattisgarh, and with M/s IL&FS Infrastructure Development Corporation for setting up of a Special Economic Zone (SEZ) at Salem. Apart from installation of a slag-based cement plant at Bhilai, which was approved earlier, the SAIL Board has also accorded approval for installation of a slag cement plant at Bokaro in a joint venture.
As a part of its continued thrust towards Corporate Social Responsibility, about 80 villages in different states of the country are being taken up for development as model steel villages by SAIL. Responding to the record H1 performance of the company, SAIL Chairman Mr. S.K. Roongta said: "Record capacity utilisation of 117% in the second quarter augurs well for strengthening the current performance. Thrust will continue to be upon implementation of our modernisation & expansion plans, in order to play a vital role in the growth phase of the country."