New Delhi, May 30, 2017: The audited financial results of Steel Authority of India Ltd. (SAIL) for the financial year 2016-17 (FY17) were taken on record by the Board of Directors here today. Management’s continual thrust on gaining operational excellence has led SAIL to remain EBIDTA positive for four consecutive quarters, which stood at Rs 671.6 Crore vis-à-vis Rs (-) 2,203 Crore over corresponding period over last year (CPLY) recording an increase of Rs. 2875 Crore. The Company has narrowed down its losses by around 30% in FY17 and recorded an overall improvement including production, sales and productivity.
The Company’s sales turnover recorded an improvement of around 14% in FY17 and stood at Rs 49,180 Crore compared to Rs 43,294 Crore over CPLY. SAIL recorded the best ever sales performance, for any given year, during FY 17 with a growth of 8% over CPLY. The total sales stood at 13.11 Million Tonnes (MT) in FY17 as compared to 12.12 MT in FY16. On the production front as well, the Company recorded a growth of 12% in saleable steel production for FY17 over FY16. The techno-economic parameters showed improvement in FY17 of 3% in Coke rate and 6% in BF productivity over CPLY. The Profit After Tax (PAT) narrowed to Rs (-) 2,833 Crore, an improvement of 30%, over CPLY which stood at Rs (-) 4,021 Crore in FY16.
The unprecedented increase in coal prices during FY17 impacted the numbers and stunted the overall margins. In FY 17, there was an impact of around Rs 4,300 Crore increase over FY 16 on account of prices of both imported and domestic coal which neutralized the significant improvement in Net Sales Realization (NSR) during FY17 over FY16. Along with this, the charges for capitalization of assets on account of interest and depreciation have also gone up affecting the margins. Also, in FY 17 there was a one-time expense on account of VR Scheme which was a part of the company’s long term strategy for manpower rationalisation.
Braving these factors, the Company managed to register substantial reductions over CPLY in expenditure on account of manpower by 8% with a total improvement of 2% in the overall cost per tonne. Owing to intensive internal measures ranging from focus on ramping up production from new facilities, stabilizing of modernized units, improvement in Techno-Economics and management’s efforts on boosting customer focus, renewing employee involvement through various internal communication exercises, etc., SAIL witnessed improvement in it’s physical and financial performance.
Speaking on the occasion, Chairman, SAIL, Mr. P.K. Singh said, “The Company’s uninterrupted efforts to achieve operational excellence has helped us become EBDITA positive for the fourth time in a row. Despite the sharp hike in imported and domestic coal prices, which has also neutralized the NSR gains, we have managed to compress the loss. There is an improvement in the performance on all accounts.
During the year 2017-18, the Company has a target to produce more than 15 MT of saleable steel and will be giving thrust on value added products from the new modernized facilities like Universal Rail Mill at Bhilai, New Plate Mill at Rourkela, Structural Mills at Burnpur and Durgapur, Cold Rolling Mill at Bokaro and Wire Rod Mill at Burnpur. In future, we are committed to continue our focus on increasing the proportion of ready to use materials in our product basket, improving the mill production, ramping up new facilities and thrust on raising NSR. Two new Steel Processing Units of SAIL at Kandrori (Himachal Pradesh) and at Jagdishpur (Uttar Pradesh) for production of TMT will commence operations this year. The concerted efforts of management in raising the bar in entirety would show results in the coming times.” He also added that the, “National Steel Policy charts a progressive and ambitious roadmap for the domestic industry both in terms of production and consumption. The Government’s impetus on infrastructure development will give a major boost to the consumption across the country.”