SAIL NET PROFIT DIPS BY 35.25% IN Q1
NEW DELHI: State-owned SAIL’s net profit dipped by 35.25 per cent to Rs 450.91 crore during the April- June quarter on account of decline in net sales realisation due to subdued price and rise in employee costs.
The profitability of the country’s largest steel maker, with 14 million tonne annual capacity, is likely to improve in the current quarter as there is “no scope for any further decline in the prices,”SAILBSE-1.69% Chairman C S Verma said today.
The Steel Authority of India Ltd. had posted Rs 696.41 crore net profit in April-June quarter of the last fiscal.
The average net sales realisation of SAIL was down to Rs 35,077 per tonne, from Rs 39,369 in the year-ago period.
The steepest fall was in long products, primarily used in construction, at Rs 36,845 per tonne from Rs 42,025, recording 12.3 per cent decline. The average net sales realisation for flat products, used in automobile and other sectors, dropped to Rs 33,634 per tonne from Rs 37,365 a tonnes a year earlier.
“Prices have recently improved in international markets. For H R Coil, it is up by 10-15 per cent. Even there has been a Rs 500 a tonne rise in flat products domestically. So, there is no scope for any decline in prices which will ensure better net sales realisation for the company in the coming quarters,” Verma said here.
SAIL’s Q1, 2013-14, income from operations dropped by 4.73 per cent to Rs 10,268 crore, from Rs 10,778 crore a year earlier, although there was 5 per cent rise in sales to 2.62 MT, from 2.49 MT. All its major plants, including Bhilai, Bokaro, Durgapur and Rourkela, recorded a fall in revenue.
The production of saleable steel was also higher at 3.2 MT during the first quarter of the current fiscal from 3.02 MT a year earlier. The company is holding 0.8-0.9 MT stocks now.
Verma said SAIL has been utilising its plants at 104 per cent capacity and since there has been a huge pent-up demand in India, the company believed that there has been no concern for any production cut.
Meanwhile, with the increased production, thanks to the commissioning of the country’s largest blast furnace in its Rourkela plant, the company will also focus on ramping up exports. It is aiming to more than doubling export revenues to Rs 2,500 crore in the current fiscal, from Rs 1,200 crore a year ago.
Verma said the weakening of the rupee is one of the reasons for the company to look at increasing exports.
Meanwhile, the total Q1 expenditure at Rs 9,693.50 crore was up from Rs 9,664 crore a year earlier on 15 per cent rise in employee benefit expenses to Rs 2,294.79 crore. Finance costs also rose 53.6 per cent to Rs 191.82 crore, while other income declined 18.78 per cent to Rs 226.17 crore.
Source:Agencies