The unaudited financial results of Steel Authority of India Limited (SAIL) for October-December ’10 (Q3) of the current financial year, taken on record by the company’s Board of Directors, mirrored the market conditions in which the steel industry is operating. On the one hand is slowly firming up demand leading to record sales, while on the other a sharp hike in cost of inputs has exerted substantial pressure on margins. The SAIL Board has approved interim dividend for its shareholders at 12% of the company’s paid-up capital amounting to Rs. 495.65 crore.
With a record gross sales turnover in Q3 of Rs. 12,276.81 crore, a growth of 17.5% over the corresponding period last year (CPLY), SAIL’s turnover for the first nine months of FY’11 was Rs. 33,905.40 crore, 9.6% higher than CPLY of FY’10. In the first nine months of FY’11, SAIL’s net worth grew by Rs. 2,798 crore to Rs. 36,115 crore as on 31st December 2010. During the same period, the company’s debt-equity ratio came down from 0.50:1 to 0.39:1 as a result of better debt servicing. The company’s market borrowings came down to around Rs. 14,176 crore on 31.12.10 from a level of Rs. 16, 511 crore on 31.3.10.
Reflecting the sharp increase in prices of raw materials, particularly imported metallurgical coal, SAIL’s Q3 profit before tax (PBT) and profit after tax (PAT) at Rs. 1,628.20 crore and Rs. 1,107.47 crore were, however, respectively 35.8% and 33.9% lower than CPLY. The company’s PBT and PAT during the April-December’10 period were recorded at Rs. 4,969.41 crore and Rs. 3,374.13 crore, lower by 29.7% and 27.7%, respectively, over CPLY. The extent of the increase in coal prices can be gauged from the fact that, in Q3, its adverse impact over CPLY was Rs. 1,093 crore in comparison to Rs. 368 crore in Q1 and Rs. 939 crore in Q2.
To obtain economies of scale to partially neutralize the effect of the cost push, the SAIL plants stepped up production and achieved highest-ever Q3 hot metal production at over 3.96 million tonnes (MT), 12% higher than Q2 and 4% more than CPLY. Production of crude steel at around 3.7 MT was 13% and 4% higher than Q2 and CPLY, respectively.
Saleable steel production at 3.33 MT also grew 8% over Q2 and 5% over CPLY. The Q3 performance helped SAIL to achieve production growth of 2% in hot metal at 11.14 MT, 1% in crude steel at 10.24 MT and 1% in saleable steel at 9.46 MT over CPLY in April-December’10. The company achieved best-ever Q3 output through the energy-efficient continuous casting route at around 2.5 MT, taking concast production in the first nine months to a record 6.91 MT.
Better product-mix saw highest-ever Q3 production of special steels/value-added products of nearly 1.2 MT, a growth of 6% over previous best of 1.1 MT in CPLY, contributing to a record 3.52 MT of these items being produced by the SAIL plants during April-December’10. Growth over CPLY was recorded in production of value-added items such as railway wheels & axles (24%), wire rods (5%), rounds & bars (16%), plates (3%), etc., in the first three quarters.
Record Q3 sales of over 3.25 MT, showing a growth of 10.7% over CPLY, was substantially aided by 7.2% higher sales of higher value items at over 1.2 MT. Prominent among these were railway materials (35% growth), heavy structurals (10.8%), thick plates (11%), CR sheets (31%), galvanized products (15.8%), pipes (48.9%), etc.
With momentum of implementation of SAIL’s modernization & expansion plan continuing as per schedule, the company incurred capital expenditure of Rs. 2,688 crore during Q3, taking total outgo on this account so far to Rs. 8,002 crore in FY’11. Schemes completed during Q3 included installation of guillotine shear in Plate Mill of Bhilai Steel Plant, coal dust injection system in Blast Furnaces 2 & 3 at Bokaro Steel Plant and a 700 tpd Oxygen Plant at Rourkela Steel Plant, among others.
Reviewing the Q3 performance, SAIL Chairman CS Verma said: “There has been an uptrend in sales and profit compared to the preceding quarter, despite a higher cost push. I am confident that our SAIL team will leave no stone unturned to face all challenges to maintain this improving trend.”
SAIL signs MoU with Hindustan Prefab for downstream value addition
Maharatna SAIL recently signed a memorandum of understanding (MoU) with Hindustan Prefab Limited (HPL), a PSU under the Ministry of Housing & Urban Poverty Alleviation, for jointly exploring the techno-economic viability of carrying out the business of prefabricated structures in steel and cement. The MoU was signed by SAIL’s Executive Director (Corporate Planning) and the Financial Advisor & Chief Accounts Officer of HPL in the presence of SAIL chairman CS Verma, CMD Jaiveer Srivastava, and Directors and senior executives of both companies.
The MoU is the first step by SAIL and HPL towards jointly participating in projects using prefabricated structures in steel and cement. The prefab sector in India is at present highly unorganised and has huge growth potential.
The MoU envisages a study to be conducted into the techno-economics of the prefab sector along with its market potential.
Speaking on the occasion, Verma said: “Stress on creating basic infrastructure through prefab material is of great significance in today’s scenario of high cost of raw materials. We must try to find more avenues for use of prefabricated material.”
HPL CMD commented that he was delighted with his company’s association with SAIL and looked forward to strengthening the bond through the provisions of the MoU.
SAIL is the largest producer of steel in India with a wide product range that includes all the items required by the prefab sector, such as HR coils, plates, GP coils, structurals, coated steel sheets, etc.
With a record gross sales turnover in Q3 of Rs. 12,276.81 crore, a growth of 17.5% over the corresponding period last year (CPLY), SAIL’s turnover for the first nine months of FY’11 was Rs. 33,905.40 crore, 9.6% higher than CPLY of FY’10. In the first nine months of FY’11, SAIL’s net worth grew by Rs. 2,798 crore to Rs. 36,115 crore as on 31st December 2010. During the same period, the company’s debt-equity ratio came down from 0.50:1 to 0.39:1 as a result of better debt servicing. The company’s market borrowings came down to around Rs. 14,176 crore on 31.12.10 from a level of Rs. 16, 511 crore on 31.3.10.
Reflecting the sharp increase in prices of raw materials, particularly imported metallurgical coal, SAIL’s Q3 profit before tax (PBT) and profit after tax (PAT) at Rs. 1,628.20 crore and Rs. 1,107.47 crore were, however, respectively 35.8% and 33.9% lower than CPLY. The company’s PBT and PAT during the April-December’10 period were recorded at Rs. 4,969.41 crore and Rs. 3,374.13 crore, lower by 29.7% and 27.7%, respectively, over CPLY. The extent of the increase in coal prices can be gauged from the fact that, in Q3, its adverse impact over CPLY was Rs. 1,093 crore in comparison to Rs. 368 crore in Q1 and Rs. 939 crore in Q2.
To obtain economies of scale to partially neutralize the effect of the cost push, the SAIL plants stepped up production and achieved highest-ever Q3 hot metal production at over 3.96 million tonnes (MT), 12% higher than Q2 and 4% more than CPLY. Production of crude steel at around 3.7 MT was 13% and 4% higher than Q2 and CPLY, respectively.
Saleable steel production at 3.33 MT also grew 8% over Q2 and 5% over CPLY. The Q3 performance helped SAIL to achieve production growth of 2% in hot metal at 11.14 MT, 1% in crude steel at 10.24 MT and 1% in saleable steel at 9.46 MT over CPLY in April-December’10. The company achieved best-ever Q3 output through the energy-efficient continuous casting route at around 2.5 MT, taking concast production in the first nine months to a record 6.91 MT.
Better product-mix saw highest-ever Q3 production of special steels/value-added products of nearly 1.2 MT, a growth of 6% over previous best of 1.1 MT in CPLY, contributing to a record 3.52 MT of these items being produced by the SAIL plants during April-December’10. Growth over CPLY was recorded in production of value-added items such as railway wheels & axles (24%), wire rods (5%), rounds & bars (16%), plates (3%), etc., in the first three quarters.
Record Q3 sales of over 3.25 MT, showing a growth of 10.7% over CPLY, was substantially aided by 7.2% higher sales of higher value items at over 1.2 MT. Prominent among these were railway materials (35% growth), heavy structurals (10.8%), thick plates (11%), CR sheets (31%), galvanized products (15.8%), pipes (48.9%), etc.
With momentum of implementation of SAIL’s modernization & expansion plan continuing as per schedule, the company incurred capital expenditure of Rs. 2,688 crore during Q3, taking total outgo on this account so far to Rs. 8,002 crore in FY’11. Schemes completed during Q3 included installation of guillotine shear in Plate Mill of Bhilai Steel Plant, coal dust injection system in Blast Furnaces 2 & 3 at Bokaro Steel Plant and a 700 tpd Oxygen Plant at Rourkela Steel Plant, among others.
Reviewing the Q3 performance, SAIL Chairman CS Verma said: “There has been an uptrend in sales and profit compared to the preceding quarter, despite a higher cost push. I am confident that our SAIL team will leave no stone unturned to face all challenges to maintain this improving trend.”
SAIL signs MoU with Hindustan Prefab for downstream value addition
Maharatna SAIL recently signed a memorandum of understanding (MoU) with Hindustan Prefab Limited (HPL), a PSU under the Ministry of Housing & Urban Poverty Alleviation, for jointly exploring the techno-economic viability of carrying out the business of prefabricated structures in steel and cement. The MoU was signed by SAIL’s Executive Director (Corporate Planning) and the Financial Advisor & Chief Accounts Officer of HPL in the presence of SAIL chairman CS Verma, CMD Jaiveer Srivastava, and Directors and senior executives of both companies.
The MoU is the first step by SAIL and HPL towards jointly participating in projects using prefabricated structures in steel and cement. The prefab sector in India is at present highly unorganised and has huge growth potential.
The MoU envisages a study to be conducted into the techno-economics of the prefab sector along with its market potential.
Speaking on the occasion, Verma said: “Stress on creating basic infrastructure through prefab material is of great significance in today’s scenario of high cost of raw materials. We must try to find more avenues for use of prefabricated material.”
HPL CMD commented that he was delighted with his company’s association with SAIL and looked forward to strengthening the bond through the provisions of the MoU.
SAIL is the largest producer of steel in India with a wide product range that includes all the items required by the prefab sector, such as HR coils, plates, GP coils, structurals, coated steel sheets, etc.
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