The unaudited financial results of Maharatna Steel Authority of India Limited (SAIL) for April-June (Q1) of the current financial year, showed 19.7% growth in sales turnover at Rs. 11,891 crore, over the corresponding period last year (CPLY). However, due to sharp increase in input costs, profit after tax (PAT) at Rs. 838 crore was lower by 29% compared to CPLY. During Q1, SAIL had to bear 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 FY'12. The company registered profit before tax (PBT) of Rs. 1,229 crore, 29.7% lower than CPLY. The results were taken on record here today by the company's Board of Directors.
The impact of higher cost was, however, partially neutralised by better product-mix, higher sales and savings achieved through management initiatives.
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 last year despite shutdown of two blast furnaces for capital repairs during April-June'11. Higher production was recorded in items such as HR plates (12%), ERW pipes (14%), CR coils/sheets (9%), medium structurals (7%), HR coils (6%), rails (2%), etc. Thrust was also laid on production of crude steel through the energy-efficient continuous casting route. As a result, highest-ever Q1 production of crude steel through this route was achieved at 2.35 million tonnes, showing a growth of 5% over CPLY.
At 2.75 million tonnes, sales of steel by SAIL were 18% higher than CPLY, with domestic sales growing at 17% to 2.67 million tonnes and 131% increase in exports at 84,000 tonnes. Q1 saw sales growth in value-added items such as wire rods (65%), galvanized products (43%), HR coils (30.6%), pipes (28.5%), railway materials (10%), etc. Growth of 21% in sales through the company's countrywide dealer network also contributed handsomely. Branded products such as SAIL-JYOTI (galvanized plain & corrugated sheets) and SAIL-TMT (rebars) witnessed sales growth of 57% and 9.5% respectively through this distribution channel. During Q1, 51 new dealers were added to SAIL's ever-expanding dealer network.
Responding to the Q1 results, SAIL Chairman Mr. C.S. Verma said: With coking coal prices expected to moderate in the coming months due to stabilization of production in Australian mines that were affected by floods, we are hopeful that our cost burden will ease in the following quarters of this financial year. Also, though steel prices have remained stable and demand for steel subdued so far, we are looking at domestic demand growing progressively in the latter half of FY ' 12.