Financial Daily from THE HINDU group of publications
Thursday, Aug 01, 2002
Financial Daily from THE HINDU group of publications Thursday, Aug 01, 2002 |
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Corporate Results
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Steel SAIL pares losses in Q1; plans another price hike Indrani Dutta
KOLKATA, July 31 STEEL Authority of India Ltd (SAIL) is hopeful of paring its losses substantially during the current fiscal, even as it plans another price increase this month. Mr V.S. Jain, SAIL Director (Finance), who has been shortlisted as the next chief of the public sector steel conglomerate, indicated to Business Line that losses were expected to be pared by more than 50 per cent in this fiscal. He said that at a time when domestic steel consumption had increased by 10 per cent, SAIL sold 21.9 lakh tonnes of steel during the first quarter of the year, indicating a 30 per cent growth. "We are planning another round of price increase of around Rs 500 per tonne this month,'' he said. The company's unaudited results, which were taken on record by the board today, showed a Rs 309-crore net loss (Rs 376 crore). Cash losses were curtailed by 76 per cent at Rs 22 crore. He said the improvement had come about despite a Rs 162-crore increase in input costs. Net sales realisation increased by 6.5 per cent with a production growth of five per cent and a sales volume increase of 25 per cent. Interest payouts stood at Rs 369 crore, which was Rs 28- crore lower than in the same period the previous year. Mr Jain said that while Durgapur Steel and Rourkela Steel were expected to show better results during the remaining part of 2002-03, Bhilai Steel and Bokaro Steel had already showed improvements. Pointing out that apart from the largely market-driven price increases, the improved financial performance was mainly due to measures taken over the last five years, he said that SAIL saved Rs 3,051 crore by way of cost-reduction since 1997-98. SAIL sources said that the resulting efficiencies included better cash management leading to a reduction in the debt level. "Cost-control and savings have been effected in almost all the major areas of operation, including reduction in consumption of coking coal and other raw materials, lower expenditure on stores and spares/contractual maintenance and savings in power and fuel consumptions.'' Savings have also been effected through improvement in techno-economic factors such as blast furnace(BF) productivity, energy consumption and mill yields. While coke rate has dropped from 594 kg per therm in 1997-98 to 557 in 2001-02, BF productivity in the four plants of SAIL has also improved as has energy consumption. Production through continuous casting increased even as Durgapur and Bokaro concast operated above capacity. Sources said that the cost-saving gains significance when viewed in the backdrop of the increases in input prices, which varied between 10 per cent and 40 per cent, indicating an impact of Rs 2,000 crore. He said that improved marketing, cost-cutting and hiving of non-core assets were the three tenets of the restructuring plan of SAIL, which was approved by the Government.
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