Rashtriya Ispat Nigam Ltd (RINL), also known as Vizag Steel, has seen its production fall and losses widen on account of liquidity issues. The PSU steel-maker has also delayed salary payments for September and October following a cash crunch.
For FY-23, the company reported a loss of nearly ₹2,859 crore; while for the first half of FY-24 (April–September), losses widened to ₹2,058 crore, almost 70 per cent of the numbers reported for full year 2022-23.
Loss before taxation stood at ₹3,237 crore; while for H1 FY-24 losses before tax was ₹2,269 crore.
Incidentally, as per a response tabled in the Parliament, the steel-maker had reported net profits in two of the last five years at ₹96.70 crore in FY-19 and ₹913 crore in FY-22. The net losses in FY-20 and FY-21 were at ₹3,910 crore and ₹1,012 crore, repsectively.
Revenue from operations varied between ₹28,359 crore (the best over the last five years) in FY-22 and ₹15,920.50 crore (the lowest) in FY-20. For H1FY-24, revenue was ₹11,641.32 crore.
The steel maker’s production capacity has also dipped over the last five years. From 5.5 million tonnes (mt) of annual production and a capacity utilisation of 87 per cent in FY-19, it dropped to 4.3 mt with a capacity utilisation of 68 per cent in FY-23. Barring FY-22, when production was 5.5 mt and capacity utilisation was 87 per cent, there has been a fall for all the other years.
So far in FY-24, production has also dipped April onwards. Liquid steel production in the first month of the fiscal was 415,000 tonnes, which went down subsequently to 368,000 tonnes in October. Lowest production was reported in May at 246,000 tonnes.
“There is a fall in production in the current year due to liquidity constraints,” Faggan Singh Kulaste, Minister of State for Steel, said in a response to the Parliament.
The response mentioned that salary payments to the employees of RINL for the month are made on 1st day of the following month.
“In case of September 2023 and October 2023, the salary payments were made within the first week of the following month due to liquidity constraints,” the Minister of State’s response said.
In order to increase production, RINL is sourcing iron ore and coal from alternate sources, “other than the regular sources to ensure increased availability of raw material”.
The company is also working on the cost front which include maximisation of indigenous coking coal in the coal blends.
The Ministry of Steel is also talking to the Ministry of Coal for supply of domestic coking coal and thermal coal to RINL; while the Ministry has also requested the Odisha State Government for allocation of iron ore block through reservation route.