The unaudited financial results of Maharatna Steel Authority of India Limited (SAIL) for the quarter Q1FY13, taken on record by its Board of Directors here today, showed the company's turnover for April-June (Q1) of FY '13 at Rs. 11912 crore, higher than Rs. 11907 crore in corresponding period last year (CPLY). However, Profit before tax (PBT) at Rs. 1010 crore was lower compared to Rs. 1240 crore in CPLY, mainly due to higher input costs and foreign exchange fluctuations, which saw the Rupee weakening by a steep 21 per cent in Q1FY13 compared to CPLY. Consequently, the company reported a PAT of Rs. 696 crore, as against Rs. 848 crore in CPLY.
The impact of higher input costs was, however, partially neutralised by higher Net Sales Realizations in Q1FY13 , which grew by 8.5 per cent compared to the corresponding period last year (CPLY) . This was helped by internal measures taken by the company which yielded a richer product mix in Q-1 of FY13 with production of value-added steel growing by 8 % over the CPLY. Besides, improvement in techno-economic parameters further boosted the performance. Coke rate, energy consumption and Blast Furnace productivity were 2%, 2 % and 1 % better as compared to CPLY.
Modernization & Expansion Plan (MEP) of the company is moving ahead as planned. Capital expenditure was Rs. 1960 crore in Q1FY13. In this quarter, several MEP projects were completed. These included Sinter Plant at Rourkela Steel Plant (RSP), new Barrel Reclaimer at the Raw Material Handling Plant of Durgapur Steel Plant (DSP), a new Ladle Furnace No.-2 at Alloy Steels Plant (ASP), Durgapur, new Coke Oven Battery #11 and wagon tipplers in Coal Handling Plant (CHP) at IISCO Steel Plant (ISP) and Air Separation Unit No-4 in Oxygen Plant-2 of Bhilai Steel Plant (BSP).
In the coming months, Sinter Plant and Wire Rod mill at ISP which are in advanced stage of completion are likely to become operational by year end. A new Coke oven Battery and Medium Structural Mill at DSP shall also be put into operation soon. Apart from this two new Blast Furnaces of 4060 m3 capacity one each at RSP & ISP are expected to come into operation.
While SAIL's expansion programmes are taking firm shape, the company's strategic initiatives for long-term competitiveness have also gathered momentum. Several measures were taken in the last quarter towards this end. SAIL signed a joint venture agreement for setting up a Wagon Components Manufacturing facility in Jellingham, West Bengal , with an estimated capital outlay of Rs 200 crores for the project. This will have a capacity to produce 10000 bogies and 10000 couplers per month.
SAIL also signed a memorandum of agreement with Kobe Steel of Japan at Kobe's headquarters in Tokyo recently for setting up a 0.5 million tonne per annum iron nugget making plant using Kobe's patented ITmK3 technology at SAIL's Alloy Steels Plant in Durgapur, West Bengal, India with an investment of Rs. 1,500 crore. Further diversifying into related areas, the SAIL led consortium is submitting the bid for copper deposits at Shaida, Afghanistan today. This consortium had earlier qualified for participation in the tender process for copper and gold mines in Afghanistan.
On the occasion of the quarterly result announcement, Chairman SAIL Mr. C.S. Verma stated, "We are optimistic about the domestic market which has the potential to strengthen as infra-related activities pick up. Our focus on bringing in new capacities will ensure that we are well positioned to leverage the market."
Photo caption: SAIL Chairman Mr. C. S. Verma, addressing the media during press meet on Q1 results.