SAIL records highest-ever Q2 net profit at Rs 1700 crore, 18% growth

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New Delhi, Oct 30 (UNI) Public sector unit Steel Authority of India Ltd (SAIL) has achieved the highest-ever July-September (Q2) net profit of Rs 1,700.24 crore during the current financial year.

This was 18 per cent higher than the net profit achieved in the corresponding period last year (CPLY). This helped the company to achieve the highest-ever first-half (H1) net profit of Rs 3,225.36 crore, a growth of 14 per cent over CPLY, announced the SAIL Chairman S K Roongta.

Addressing newsmen here today, Mr Roongta said SAIL's unaudited financial results for July-September of 2007-08 were taken on record by the company's Board of Directors here this morning. He said SAIL also recorded highest-ever Q2 turnover of Rs 10,371.63 crore, showing 8.2 per cent growth over CPLY.

With this, the company achieved its highest-ever H1 turnover of Rs 19,270.08 crore, seven per cent higher than CPLY. The improvement in financial performance during Q2 of FY2008 was due to higher production of saleable steel, including value-added products, higher sales volume, improvement in major techno-economic parameters, lower interest cost and higher interest earnings.

He said saleable steel production by the SAIL plants at 3.25 million tonnes (MT) was 10 per cent higher in Q2 over CPLY. Thrust on stepping up production of value-added items continued and output touched one million tonnes, which was 20 per cent higher than CPLY.

With this, best-ever capacity utilisation of 117 per cent was also achieved in Q2.

Further improvement in key techno-economic parameters also continued, with reduction of two per cent in coke rate and one per cent in energy consumption during July-September 2007. Production through the continuous casting route went up to 2.13 MT, six per cent higher than CPLY.

Thrust on production of value-added items resulted in growth in production of electrode quality wire rods (53 per cent), high corrosion-resistant TMT bars for coastal areas (664 per cent), LPG grade steel (38 per cent), SAILCOR (100 per cent), rails (11 per cent), tinplate (59 per cent), etc, during July-September 2007.

He said continuing with its policy of giving priority to the needs of the domestic market, SAIL strengthened its distribution network by taking the number of authorised dealers to 1,287 covering all the districts in the country.

Sales through dealers increased more than five-fold from 13,000 tonnes in CPLY to 69,000 tonnes in Q2.

With further reduction in the level of borrowings during H1, the company's debt-equity ratio improved to 0.16:1 on 30.9.07, in comparison to 0.24:1 achieved on 31.3.07. The net worth of the company crossed Rs 20,000 crore as on September 30, this year.

During this quarter, the SAIL Board accorded approvals for investment of over Rs 15,000 crore for modernisation and expansion schemes of IISCO Steel Plant and Salem Steel Plant.

Several new initiatives taken during the quarter include, inter-alia, entering into MoUs with POSCO to form strategic alliance towards synergising the strengths of both companies, with RINL and NMDC for installation of a four million tonne per annum integrated steel plant in Chhattisgarh, and with M/s IL&FS Infrastructure Development Corporation for setting up of a Special Economic Zone (SEZ) at Salem.

Apart from installation of a slag-based cement plant at Bhilai, which was approved earlier, the SAIL Board has also accorded approval for installation of a slag cement plant at Bokaro in a joint venture.

As a part of its continued thrust towards Corporate Social Responsibility, about 80 villages in different states of the country are being taken up for development as model steel villages by SAIL.

Responding to the record H1 performance of the company, Mr Roongta said, ''Record capacity utilisation of 117 per cent in the second quarter augurs well for strengthening the current performance. Thrust will continue to be upon implementation of our modernisation and expansion plans, in order to play a vital role in the growth phase of the country''.

UNI

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