Saleable Steel production higher by 8%
Interim dividend of Rs 516 crore
Borrowings reduced by Rs 1,240 crore
Debt-equity ratio further improved to 0.36:1 as on 31 Dec’05
Steel Authority of India Limited (SAIL) posted a profit after Tax (PAT) of Rs 685 crore on a turnover of Rs 7,176 crore during the third quarter of the current financial year. With this, SAIL has recorded consistent profit for the 12th consecutive quarter. However, the PAT is lower as compared to Rs 1,514 crore achieved by the company during the corresponding quarter of the previous year. SAIL plants produced 3.6 million tonnes (MT) of hot metal, 3.4 MT of crude steel and 3.03 MT of saleable steel during October-December 2005 recording a growth of 8%, 6% and 3% respectively over the corresponding period last year (CPLY). Saleable steel production at 8.59 MT during April-December 2005 was 8% higher over CPLY.
SAIL also announced an interim dividend of Rs 516 crore for the second consecutive year at the board meet held this morning in which the company’s unaudited financial results were taken on record. The interim dividend has been computed at the rate of 12.5% on paid-up equity capital.
The lower profitability was essentially on account of lower level of steel prices and higher costs of input, mainly coking coal. In view of the over capacity of steel in the international market with China becoming an exporter, there has been pressure on steel prices. The rise in the prices of coking coal alone put an additional burden of over Rs 1,000 crore during April-December 2005 on the steel major. Market is now stable and it is expected that prices of imported coking coal may decline now.
SAIL’s PAT for the first nine months of 2005-06 was Rs 2,935 crore as against Rs 4,139 crore in the CPLY. With an overall improvement in techno-economic parameters, the company improved its average capacity utilisation to the level of 107% as against 104% achieved during the last financial year.
SAIL recorded a turnover of Rs 21,330 crore during April-December 2005. The company reduced its borrowing by Rs 1,240 crore to the level of Rs 4,530 crore as on 31 December 2005 and reduced its interest charges by Rs 98 crore during the first nine months of the current financial year. SAIL’s debt-equity ratio further improved to 0.36:1 as on 31 December 2005 as against 0.58:1 recorded on 31 March 2005. Having equivalent deposit with banks, the company is virtually debt free.
In the meantime, SAIL has made steady progress in the implementation of its corporate plan 2011-12. By now, capital schemes valued at around Rs 3,900 crore are under various stages of implementation across the company. In addition to these ongoing projects, the SAIL Board today granted ‘final’ approval for four new schemes and ‘in-principle’ approval for four other schemes at a total estimated cost of more than Rs 400 crore. The key projects that were granted approval in today’s board meet are ‘Installation of 2nd Ladle Furnace in Continuous Casting Shop of SMS II at Bokaro’, ‘Installation of Enterprise Resource Planning at Bokaro’, and ‘Installation of Bloom Caster in Steel Melting Shop at VISL’.
Some of the major schemes that got commissioned in the recent past include upgradation of Blast Furnace # 4 and ERW Pipe Plant, and installation of cast house slag granulation plant in blast furnace # 1 at Rourkela Steel Plant (RSP), replacement of stands in Merchant Mill at Bhilai and installation of a ladle furnace at Durgapur.
Reflecting on the company’s financial performance, Mr V.S. Jain, Chairman, SAIL, remarked, “The financial position of SAIL is fundamentally strong to withstand market fluctuation. Now, there appears to be stability in steel prices. Moreover, with a high level of economic growth in the country, the consumption of steel will continue to increase. Our company has a progressive growth plan and is steadily moving ahead to newer heights.”