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SAIL achieves highest-ever net profit of Rs. 2625 cr

New Delhi, October 29, 2004

Steel Authority of India Limited (SAIL) has broken all previous records in the first half of the current financial year. The company’s net profit of Rs. 2,625 crore during April-September 2004-05 not only showed a whopping increase of 245% over the corresponding period of last year but also surpassed the all-time high annual net profit of Rs. 2,512 crore recorded during the last fiscal. The SAIL Board of Directors took the half yearly results for 2004-05 on record here today.

The company leveraged its strengths of a varied product basket and flexibility in production by changing its product-mix to maximise earnings. Thrust on production of value-added items during April-September 2004-05 led to a volume increase of 21% in plates, high-value wheels & axles (44%), heavy structurals (42%), medium structurals (8%), bars & rounds (8%) and rails by 2% over the corresponding period last year. Production of semis was reduced by 37% during H1 over CPLY, in keeping with the company’s shift in outlook towards higher production of finished steel items.

As a result of higher earnings from sales, the company achieved substantial top-line gains. Sales turnover in the first half of the current fiscal increased by 25% over CPLY to a record level of Rs. 13,026 crore. Domestic sales at 4.38 million tonnes during April-September ’04 was higher by around 2.4% over the same period last year. Continuing with its commitment to enhance the supply of steel in the domestic market, SAIL restricted exports by more than 72% at 1.74 lakh tonnes during the period.

The coal supply situation, which was a major constraint since the beginning of the current fiscal, stabilised towards the end of H1. This was reflected in the overall improvement in most of the production parameters during Q2 compared to the Q1 performance. Production of saleable steel soared by 17% from 2.3 million tonnes in Q1 to the level of 2.7 million tonnes in Q2 of 2004-05. This surge in production was further aided by improvement in key techno-economic parameters during H1. Production through the energy-efficient continuous cast route improved by 5% to a level of 65% of total saleable steel produced. The coke rate reduced by 1% to the level of 539 kilogram per tonne of hot metal (kg/thm) and energy consumption came down from 7.48 giga calories per tonne of crude steel (gcal/tcs) to 7.46 gcal/tcs during April-September’04 as against the same period last year.

With the steady improvement of performance, SAIL reduced its debt by around Rs. 1,783 crore during H1. The debt level of the company which stood at Rs. 8,689 crore at the end of March ’04, thus came down to Rs. 6,906 crore as on 30th September ’04. This enabled the company to improve its debt-equity ratio to 0.94:1 from 1.86:1 as on 1st April ’04. During H1, the company’s interest outgo was also reduced by Rs. 231 crore in comparison to the corresponding period last year.

Commenting on the continuing trend of improved profitability, Mr V.S. Jain, Chairman, SAIL, said: "We are comfortable today but certainly not complacent about the company’s future. We have already drawn a roadmap for the company’s growth and our attempt will be to incorporate the latest and the best technologies so as to position ourselves amongst the most competitive steel producers in the world. The investments have been planned judiciously to ensure sustainable growth for the company."

At present, several major projects costing more than Rs 1,000 crore are in various stages of implementation in all the SAIL plants. Long rail facilities at Bhilai Steel Plant are complete. Among SAIL’s major ongoing projects are: installation of bloom caster (Rs. 271 crore) and ladle furnace (Rs. 21 crore) at Durgapur Steel Plant; upgradation of ERW Pipe Plant (Rs. 89 crore), rebuilding of Coke Oven Battery # 1 (Rs. 112 crore), capital repairs of Blast Furnace # 4 (Rs. 118 crore) and replacement of turbo alternator (Rs. 32 crore) at Rourkela Steel Plant; new turbo generator (Rs. 48 crore) and upgradation of Merchant Mill (Rs. 18 crore) at Bhilai Steel Plant. Plans are on the anvil for several other projects during the second half of the current financial year.

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