Financial Daily from THE HINDU group of publications
Thursday, Aug 01, 2002

Port Info

Group Sites

Corporate Results - Steel

SAIL pares losses in Q1; plans another price hike

Indrani Dutta

KOLKATA, July 31

STEEL Authority of India Ltd (SAIL) is hopeful of paring its losses substantially during the current fiscal, even as it plans another price increase this month.

Mr V.S. Jain, SAIL Director (Finance), who has been shortlisted as the next chief of the public sector steel conglomerate, indicated to Business Line that losses were expected to be pared by more than 50 per cent in this fiscal.

He said that at a time when domestic steel consumption had increased by 10 per cent, SAIL sold 21.9 lakh tonnes of steel during the first quarter of the year, indicating a 30 per cent growth.

"We are planning another round of price increase of around Rs 500 per tonne this month,'' he said.

The company's unaudited results, which were taken on record by the board today, showed a Rs 309-crore net loss (Rs 376 crore). Cash losses were curtailed by 76 per cent at Rs 22 crore.

He said the improvement had come about despite a Rs 162-crore increase in input costs. Net sales realisation increased by 6.5 per cent with a production growth of five per cent and a sales volume increase of 25 per cent.

Interest payouts stood at Rs 369 crore, which was Rs 28- crore lower than in the same period the previous year.

Mr Jain said that while Durgapur Steel and Rourkela Steel were expected to show better results during the remaining part of 2002-03, Bhilai Steel and Bokaro Steel had already showed improvements.

Pointing out that apart from the largely market-driven price increases, the improved financial performance was mainly due to measures taken over the last five years, he said that SAIL saved Rs 3,051 crore by way of cost-reduction since 1997-98.

SAIL sources said that the resulting efficiencies included better cash management leading to a reduction in the debt level.

"Cost-control and savings have been effected in almost all the major areas of operation, including reduction in consumption of coking coal and other raw materials, lower expenditure on stores and spares/contractual maintenance and savings in power and fuel consumptions.''

Savings have also been effected through improvement in techno-economic factors such as blast furnace(BF) productivity, energy consumption and mill yields.

While coke rate has dropped from 594 kg per therm in 1997-98 to 557 in 2001-02, BF productivity in the four plants of SAIL has also improved as has energy consumption.

Production through continuous casting increased even as Durgapur and Bokaro concast operated above capacity.

Sources said that the cost-saving gains significance when viewed in the backdrop of the increases in input prices, which varied between 10 per cent and 40 per cent, indicating an impact of Rs 2,000 crore.

He said that improved marketing, cost-cutting and hiving of non-core assets were the three tenets of the restructuring plan of SAIL, which was approved by the Government.

Send this article to Friends by E-Mail

Stories in this Section
Nirma net down at Rs 45.45 cr

Bharti Tele Q1 loss up at Rs 67 cr
Tata Chem net up 158 pc in Q1
BHEL records Rs 48.91-cr loss
L&T reports 31.4 pc drop in Q1 net profit
Britannia net up at Rs 18.7 cr
Reliance Q1 net up 16.5%
RPL profit up at Rs 480 cr
BPCL's other income doubles
IOC net up 12.7 pc in Q1
Dr Reddy's Q1 net up 50% at Rs 80 cr
Aurobindo Pharma Q1 net up 34 pc
Glenmark Pharma PAT at Rs 3.04 cr
CESC pares losses
SAIL pares losses in Q1; plans another price hike
Bhilai Steel makes Rs 98-cr profit in Q1
Jindal Strips sales up 62 pc in Q1
Century Textiles profit dips
Arvind Mills notches profit in Q1
Raymond back in black; Q1 net at Rs 4.3 crore
Jindal Polyester net zooms 175 pc
Precot Mills turnover, net rises
UB Beer sales up 18%
Gillette India nets Rs 4.29 cr profit in Q2
Sundram Fasteners Q1 profit up
Punjab Tractors Q1 net down
Whirlpool posts 15 pc rise in Q2 turnover
Agro Tech Foods incurs loss
Hinduja TMT profit up 39.5 pc
Higher input costs drag down Hindalco profit — Net declines 13% to Rs 140.2 cr
TNPL sales, net rise
J.K. Industries net, sales rise
Tata Fin net loss at Rs 9.76 cr
Srei International net up 8.25 pc
CUMI makes Rs 21-cr profit on unit sale
Titan prunes Q1 loss to Rs 10 crore
GSK Consumer to pay 33% interim
Dabur India Q1 net rises 30.7 pc
ICICI Bank Q1 net at Rs 253 cr
Dhanalakshmi Bank posts higher net in Q1
KVB net up
Interest income boosts Q1 net for Allahabad Bank
SBH net rises 44 pc
Sterlite Opticals posts Q1 loss

The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | Home |

Copyright 2002, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line