SAIL net up 105% to Rs 1514 cr

BS 200 SCORECARD

Steel Authority of India Ltd (SAIL) has put up a stellar show by reporting 105 per cent increase in its net profit for the third quarter (Q3) of the financial year to Rs 1,514 crore from Rs 738 crore for the same quarter in the previous financial year.

Profit before tax increased by more than 250 per cent to touch a record Rs. 2,711 crore (Rs. 767 crore for the corresponding quarter of previous year.

During the current financial year, the company achieved progressive improvement in performance with the saleable steel production increasing steadily by 17 per cent in second quarter (Q2) over first quarter (Q1)and further by 8 per cent in Q3 over Q2.

For the first three quarters, the steel giant has increased its net profit by 176 per cent to Rs. 4,139 crore against Rs 1,498 crore in the corresponding period last year.

The company's turnover reached a new high of Rs 21,558 crore, in the first three quarters, recording a growth of 27 per cent over Rs 16,934 crore achieved during corresponding period of the previous year.

The board for the first time since 1997-98 announced an interim dividend of 15 per cent amounting to Rs 619.56 crore, out of which the government would get Rs 531.7 crore.

The company's financial statements further made provisions of Rs 81 crore towards dividend tax. The steel major had wiped out its accumulated loss of Rs 2,765 crore from its record books by the end of 2003-04.

Earlier, SAIL surpassed even the highest ever full year net profit of Rs 2,512 crore achieved during 2003-04 with a new record figure of Rs. 2,625 crore in the first six months of the current fiscal.

All the seven production units of SAIL have shown substantial improvement in financial performance. While six units are now operating with profit the seventh unit - Alloy Steels Plant - has substantially reduced losses to Rs 10 crore in Q3 of the current fiscal from Rs. 31 crore in the same period of the previous year.

VISL, SAIL's one of the three special steel plants, entered a profit zone after long years in the third quarter as against a loss Rs 19 crore achieved in Q3 of 2003. Another special steel plant of SAIL - Salem Steel Plant also earned profit in the third quarter.

SAIL's performance assumes special significance in view of the coal crisis arising out of force majeure conditions that hampered production in the first few months of the current financial year.

Total borrowings of the company stood at Rs. 6,586 crore by end of December 2004 against Rs. 8,689 crore in the beginning of the current year.

Interest charges on operation account was reduced by Rs. 266 crore (37 per cent) to Rs. 448 crore during April-December 2004. SAIL has also been able to rationalise its manpower by further 3,700 in the current year. Since March 1998 the total manpower of SAIL has been reduced by around 48,000.

V S Jain, chairman, said the continuing trend of robust performance has further increased the company's confidence to move on a growth path charted out by the company.