Hit hard by higher raw material costs, Steel Authority of India (SAIL) today reported a 29% dip in net profit to Rs 838 crore for the first quarter of the current fiscal despite nearly 20% jump in sales.
The state-run firm had posted net profit of Rs 1,177 crore in the same quarter last fiscal, a company release said.
"During Q1, SAIL had to bear an additional expenditure of nearly Rs 580 crore on cost of coal alone. Of this, around Rs 422 crore was on account of higher cost of imported coking coal, with prices rising from $200 per tonne in Q1 last year to $330 in Q1 of FY12," SAIL said.
The company consumed raw material worth Rs 5,229 crore during the reporting quarter as compared to Rs 4,702 crore in the same quarter last fiscal.
However, SAIL said the impact of higher cost was partially mitigated by better product-mix, higher sales and savings achieved through management initiatives.
Production of crude steel rose by 5% at 2.35 million tonnes during the quarter.
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Buoyed by higher production, the net sales of the company increased to Rs 11,891 crore against Rs 9,931 crore in the same quarter last fiscal.
"Operating at 110% of rated capacity, SAIL plants maintained production of saleable steel at the same level of 3.044 million tonnes as achieved in Q1 FY11 despite shutdown of two blast furnaces for capital repairs in the April-June quarter of the current fiscal," SAIL said.