Financial Daily from THE HINDU group of publications
Friday, Jan 30, 2004
Corporate Results - Steel
SAIL clocks record profit of Rs 1,498 cr in Apr-Dec
Mr. V. S. Jain, Chairman
New Delhi , Jan. 29
RISING steel prices, in tune with the international market, and internal economies have enabled Steel Authority of India Ltd (SAIL) log a record net profit of Rs 1,498 crore on a turnover of Rs 16,934 crore in the first nine months of the current financial year.
The net profit figure for the first three quarters in 2003-04 is higher than the full year profit of Rs 1,319 crore registered in 1995-96. In the first nine months of 2002-03, SAIL had reported a loss of Rs 546 crore on a turnover of Rs 13,097 crore.
For the October-December 2003 quarter, SAIL's net profit stood at Rs 738 crore against a loss of Rs 79 crore in the third quarter of the previous fiscal. The turnover in the third quarter of the current fiscal stood at Rs 6,522 crore, an increase of 33 per cent over the Rs 4,908-crore registered in the corresponding period last year.
The company has managed to reduce the accumulated losses to about Rs 1,200 crore at the end of December 2003, the SAIL Chairman, Mr V.S. Jain, told presspersons here after the board meeting on Thursday. The company hopes to wipe out the entire accumulated losses by the next financial year.
SAIL's borrowings had come down to Rs 9,085 crore at the end of 2003, Mr Jain said, adding that "Reduced borrowing and improved financials have brought down our debt-equity ratio to around 2.5 from a level of 6.5 in the beginning of the financial year."
The Chairman said that SAIL had achieved savings to the tune of about Rs 900 crore from increased production, savings in interest and cost-cutting measures.
The company is set to announce a voluntary retirement scheme in February and hopes to reduce its workforce by another 2,000 employees. As part of the staff rationalisation drive, SAIL has reduced its manpower by 45,000 since 1998 and now has 1.33 lakh employees on its rolls.
Mr Jain also said the board had cleared an investment of Rs 250 crore to introduce new schemes for upgradation of various plants. The company expects to incur a capital expenditure of about Rs 800 crore to Rs 1,000 crore during the next financial year, most of which will come from internal accruals.
SAIL produced 8.17 million tonnes of steel in the first three quarters of 2003-04, which is 8 per cent higher than the 7.5-million tonne production last year. Sales volumes rose 12 per cent from about 7.02 mt to 7.88 mt.
"The outstanding feature of the company's performance has been Durgapur Steel Plant entering a net profit zone after a long time. The Rourkela Steel Plant also emerged from a period of sustained loss for the last five years to earn a cash profit for the first nine months. The special steel plants, which had earlier dragged down the company's profitability, also managed to reduce their losses by more than Rs 100 crore," he said.
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