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Major steel producer SAIL has posted a whopping 117% increase in its net profit at Rs 1,180 crore for the quarter ended September 30 this year, owing to one-time gain of Rs 1,056 crore for damages from foreign suppliers of coking coal as well as cheaper coal prices.
It had posted a net profit of Rs 543.11 crore for the same quarter previous year.
"One of the reasons in increase in our profit was lesser prices of coal. The price of the imported coal which was $220 per tonne during the second quarter fiscal has come down to $135 per tonne. So, there was a savings of Rs 885 crore to the company on this account," SAIL Chairman C S Verma said.
Also, during the quarter, the company received an amount of Rs 1,056.26 crore towards damages due to non-supply of full quantity of contracted hard coking coal by global mining major Vale. The amount has been considered as an 'exceptional item' by the company .
However, this did not truly reflect on the profitability of the company as it had to make a provision, which stands at Rs 1,150 crore now, for an impending wage hike of its close to 85,000 non-executives.
The total income for the second quarter this year grew by 6.6% at Rs 11,535.51 crore, against Rs 10815.56 crore in the same quarter previous year. It’s total expenditure at Rs 11,067.42 crore was nearly 96% of its total income during the second quarter.
Its finance costs were also up over 16% to Rs 216.48 crore, while other income declined by over 33% to Rs 152.71 crore in the last quarter. Though, the tax outgo declined by over 13% to Rs 212 crore in Q2 FY'14.
SAIL largely met its 15-16 million tonne (MT) coking coal requirements through imports, mostly from the US and Australia.
There was a decline in realisation of about Rs 720 crore during the second quarter this year compared to the year-ago period. "Sales realisation during the second quarter of the last financial year was Rs 37,210 per tonne. During this quarter, this came down to Rs 34,230 per tonne, thus there is a dip of 6.5% in realisation," Verma said.
Despite the decline in realisation, which has a bearing on the prices, SAIL sold 3.015 MT steel during the quarter, as against 2.616 MT a year ago, clocking a 15% growth.
The company’s stocks fell by 1.82% to close at Rs 64.85 on the Bombay Stock Exchange today.
