Steel Authority of India Limited (SAIL) achieved highest ever H1 (first half) profit before tax of Rs. 3,408 crore for 2005-06, a growth of 12.5% over the corresponding period last year (CPLY) backed by best-ever physical performance in hot metal, crude steel and saleable production. SAILÔÇÖs unaudited financial results for April-September 2005 were taken on record by the companyÔÇÖs board of directors this morning. The profit before tax for the second quarter at around Rs. 1,707 crore, however, declined by 6.4 % over CPLY mainly because of increase in price of indigenous and imported coal and reduction in net sales realisation.
The steel major recorded higher sales turnover at Rs. 7,889 crore with a growth of 6.7 % over CPLY. However, a net profit (after tax) of Rs. 1,127 crore in Q2 of the current fiscal is lower by Rs. 386 crore over CPLY mainly due to higher tax provision. In the previous year, in view of brought forward losses, unabsorbed depreciation and other relief available under the Income Tax Act, the company did not have taxable income and only minimum tax on book profits was provided under the Income Tax Act. SAIL is now providing regular tax liability. There was higher tax provision of Rs. 270 crore during Q2. SAILÔÇÖs net profit after tax amounted to Rs. 2,251 crore during H1 against Rs. 2,625 crore recorded during CPLY.
While steel companies are faced with the impact of softening of international steel prices, and sharp increase in input prices ÔÇô mainly coking coal ÔÇô SAIL could maintain its performance by significantly improving its physical parameters.
Production of saleable steel increased by 11% during April-September 2005. Average capacity utilisation of plants was about 105 % during the period. Production through the energy-efficient continuous cast route went up by 4% during the first six months of 2005-06 over CPLY. Energy consumption came down by 3% to 7.23 giga calories per tonne of crude steel (Gcal/tcs) during the period. The coke rate has also come down by 5 kilogram per tonne of hot metal (kg/thm) and the blast furnace productivity has gone up from 1.43 to 1.51 tonnes/cu.m./day during the period. While recording highest ever production of saleable steel, SAIL reduced its manpower by over 2,000 with an improvement of 6% in the labour productivity during the year.
SAILÔÇÖs debt equity ratio further improved to the level of 0.42:1 as against 0.58:1 at the beginning of the financial year. Overall debt has further come down by Rs. 565 crore in H1 and the company continues to be virtually debt-free considering the deposits in hand.
Commenting on the companyÔÇÖs performance during the first half of 2005-06, Mr. V.S. Jain, Chairman, SAIL said, "SAIL today is on a strong footing and is going ahead with a steady expansion plan to compete with the best in the steel market."
Following impending merger of IISCO, the capacity of SAIL will expand to 22.5 million tonne (MT) of hot metal production by 2011-12. In pursuit of its Corporate Plan-2012, SAIL already has initiated capital schemes worth over Rs. 3,500 crore which are at various stages of implementation. This is a part of the overall capital outlay plan of Rs. 35,000 crore by 2011-12. Some of the recently completed schemes are upgradation of BF-4 and ERW Pipe Plant at Rourkela, cast house slag granulation plant at Rourkela, Coal Dust Injection (CDI) at Bokaro and Bhilai and Coal Tar Injection (CTI) at Durgapur. Other major schemes in the pipeline include installation of bloom caster and associated facilities at DSP, installation of new slab caster at BSP, revamping Mae-West block system of Hot Strip Mill at BSL and rebuilding coke oven batteries at Bhilai, Bokaro and Rourkela Steel Plants. A systematic plan for upgradation of blast furnaces in all the plants is being taken up to improve blast furnace productivity.