The Hindu Business Line : SAIL Q3 rises to Rs 1,514 cr

SAIL has reported a net profit of Rs 1,514 crore for the quarter ended December 2004, against Rs 738 crore registered in the previous corresponding quarter, marking an increase of 105 per cent.

The company has also announced an interim dividend of 15 per cent. It had last declared a dividend in 1997-98.

Speaking to newspersons after the board meeting today, the Chairman, Mr V.S. Jain, clarified that the decision to declare an interim dividend was not prompted by Government pressure.

"There was no pressure from the Government to declare dividend. Since the company is performing well, every stakeholder has a desire for returns."

The total dividend payout would amount to Rs 619.56 crore, of which the Central Government, being the largest shareholder, would receive Rs 531.7 crore. The company has also made a provision of Rs 81 crore towards dividend tax.

The board also approved the company's corporate investment plan till 2011-12. SAIL will invest Rs 25,000 crore during the next seven years to increase total hot metal capacity from the current level of 12.5 million tonnes to 20 million tonnes per annum.

While the annual investments would go up progressively, around Rs 4,000 crore would be invested in 2005-06 and 2006-07 for de-bottlenecking and value-added products.

Mr Jain also said that the entire funding could be done internally. "Finance is not a problem. We have decided to maintain a debt-equity ratio of 1:1. We should be generating internal accruals of about Rs 2,000-2,500 crore annually. At this rate, we may not require market borrowings at all."

The SAIL Chairman also said that the company was working to ensure that its expansion plans do not get derailed because of shortage of raw materials like iron ore and coking coal.

The company is already in talks with a number of global players for taking stake in coking coalmines in Australia and with the State Governments like Jharkhand and Chhattisgarh for acquiring some iron ore mines.

Mr Jain, however, said that the arrangement with the MNCs could also be a strategic tie-up to secure long-term supply of coking coal.

SAIL's accumulated net profit in the first nine months stood at Rs 4,139 crore, up 176 per cent from Rs 1,498 crore in the same period last year. The company reported a turnover of Rs 21,558 crore (Rs 16,934 crore).

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