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Ramesh Sharma

Mr S.K. Roongta, Chairman, SAIL, and Mr Soilesh Bhattacharya, Director (Finance), addressing a press conference in the Capital on Thursday. —

Our Bureau

New Delhi, May 28 The Steel Authority of India expects to nearly double it capital expenditure to Rs 10,000 crore during this fiscal, said its Chairman, Mr S.K. Roongta. SAIL plans to borrow to the tune of Rs 5,000-6,000 crore but has not decided how. It didn’t rule out a market offering.

For the quarter ending March 31, 2009, SAIL made a net profit of Rs 1,487 crore, lower by 38 per cent compared to the Rs 2,377 crore in the corresponding period the previous year. Income was down 11 per cent to Rs 12,057.79 crore (Rs 13,479.61 crore).

For the full year, SAIL reported a net profit of Rs 6,174.81 crore (Rs 7,536.78 crore) on income of Rs 44,208.43 crore (Rs 40,215.86 crore).

“Domestic demand has improved during the last quarter of the last fiscal, with renewed activity in the construction sector and (with a) big boost in infrastructure in the offing we expect it to continue,” said Mr Roongta. While global production is estimated to be lower this year than in 2008, India’s production is estimated to be up by 1.7 per cent. Mr Roongta expects Indian production this year to be higher by 5 per cent.

“Relentless rise of steel prices in January-August, the severe meltdown and falling demand, and high raw material costs, with coking coal increasing 200 per cent and contending with wage revision, had all contributed to make the 2008-09 financial year an extremely challenging one,” said Mr Roongta. “Rigorous cost-effective measures, higher production of value-added services have helped us keep our heads above the water in spite of a severe slowdown,” he added.

SAIL managed to earn an additional Rs 1,200 crore through value-added services, and reduced the share of imported coal by five per cent, saving Rs 170 crore.

SAIL reduced employees by 7,500 last fiscal, it plans to reduce by another 6,000-7,000 more during this fiscal.

Mr Roongta added that the Jharkhand Government had accepted their claim to the erstwhile Indian Iron and Steel Company’ rights in Chiriya mines, but the dispute over the four leases of the mines remains to be settled. SAIL needs the mines to feed its expanded capacity needs. No additional capacity will be commissioned in 2009-10, the expansion being undertaken at Salem is expected to be first commissioned in March 2010.

SAIL raised Rs 735 crore from the market through long-term bonds during 2008-09. According to a company official, Rs 1,500 crore have been raised in bonds, and another Rs 4,000 crore is to be raised. The last bond issued was at a coupon rate of 7.7 per cent.

The board recommended a final dividend of Rs 1.30 a share, taking the total dividend for the year to Rs 2.60 a share (26 per cent). The company’s shares closed nearly 7 per cent up on the NSE on Thursday at Rs 164.50.

More Stories on : Steel | New Projects | Steel Authority of India Ltd

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