Best-ever Q1 saleable steel production & sales; growth in volumes at 4% & 5% resp.
Production of value-added items up 21% .
Techno indices improved further.
Modernisation & expansion related capex more than tripled during quarter.
In spite of input cost pressures and price realisations being far below the significantly high levels obtained in the first quarter of FY ÔÇÖ09, Steel Authority of India Limited (SAIL) recorded profit before tax (PBT) of Rs. 2,005.91 crore (lower by 28% y-o-y) and profit after tax (PAT) of Rs. 1,326.09 crore (lower by 27.7% y-o-y) during Q1 of the current financial year. The companyÔÇÖs net turnover at Rs. 8,950.64 crore was lower by 16.5% over the corresponding period last year (CPLY). These unaudited financial results of SAIL were taken on record here today by the companyÔÇÖs Board of Directors.
The adverse impact of input price increases, especially of coking coal by almost 49% (Rs. 868 crore), and drop in steel prices was partially neutralised by higher production and sales volumes, increase in special/value-added steel production, improved operational parameters and aggressive cost efficiencies, resulting in savings to the extent of about Rs. 570 crore during Q1. Domestic sales grew by about 5% over CPLY with best-ever Q1 sales of value-added products. Exports at 50,517 tonnes were also up by 13%. The sales performance was supported by best-ever Q1 saleable steel production at 3.06 million tonnes, a growth of over 4% over CPLY. Q1 sales turnover at Rs. 9,746.75 crore was lower by 20% over CPLY. However, EBDITA to net sales ratio rose to 27% in Q1 from 22.6% in Q4 of FY ÔÇÖ09.
SAIL plants operated at an overall capacity utilisation of 111% during the quarter. With continued thrust on production of value-added and special steels, the major SAIL plants produced 1.15 million tonnes of these items during Q1, a growth of 21% over CPLY. The growth areas included electrode-quality wire rods, SAILCOR in HR/CR coils, LPG grade HR coils/plates, etc. Today SAIL produces 61% of its total reinforcement steel output in High Strength Earthquake Resistant grade.
Further improvement in operational efficiencies helped to reduce the impact of lower realisations and higher input costs. Production through the energy-efficient continuous casting route crossed 2.2 million tonnes. Other important techno-economic indices also showed substantial improvement, with reduction in coke rate by 3.5%, specific energy consumption by 1.5% and improvement in blast furnace productivity by 5%.
To partly fund its planned capital expenditure of about Rs. 10,300 crore during the current financial year, SAIL undertook long-term market borrowings in Q1. A sum of Rs. 1,300 crore raised during Q1 brought SAILÔÇÖs debt-equity ratio to 0.30:1 as on 30th June ÔÇÖ09 from 0.27:1 as on 31st March ÔÇÖ09. With pace of projects under the expansion plan picking up, capital expenditure during the quarter at Rs. 2,469 crore was more than three times higher than incurred in Q1 of FY ÔÇÖ09. Among projects that were completed during Q1 are installation of roll grinding machine at Salem Steel Plant (SSP) and air & oxygen turbo compressor at Bokaro Steel Plant. SSPÔÇÖs Sendzhimer mill has also been upgraded successfully.
During Q1, the captive mines of SAIL at Chasnalla, Jitpur and Ramnagore produced about 2.2 lakh tonnes of coal, which was 20% higher than CPLY. SAILÔÇÖs efforts to achieve raw material security received a boost in June ÔÇÖ09 with the Ministry of Coal approving the plan to mine 4 million tonnes of coal from Tasra coking coal mine. As regards the new coal block at Sitanala, its mining plan had been approved in January ÔÇÖ09 and EIA/EMP study has been submitted for environment clearance. With regard to Rowghat iron ore mine in Chhattisgarh, the state government has recommended grant of final forestry clearance in June ÔÇÖ09. Discussions with the state of Jharkhand have been continuing at different levels to satisfactorily resolve the issue of Chiria iron ore mine.
Announcing the Q1 results, SAIL Chairman Mr. S.K. Roongta said: ÔÇ£In spite of downturn continuing in global steel markets, the overall demand scenario in India is encouraging. Although input cost pressures are easing now, SAILÔÇÖs thrust on operational and cost efficiencies will be intensified in the current and subsequent quarters and we aim to achieve best ever capacity utilisation during the year.