Financial Daily from THE HINDU group of publications
Saturday, May 29, 2004
Corporate Results - Steel
SAIL back in black, posts Rs 2,512-cr full-year net
New Delhi , May 28
A BUOYANT market coupled with internal restructuring has helped Steel Authority of India Ltd (SAIL) report a net profit of Rs 2,512 crore for 2003-04 compared with a loss of Rs 304 crore in the previous year. In fact, the company has reported its first net profit in seven years.
For the financial year ended March 31, 2004, SAIL's turnover rose 26 per cent to Rs 24,178 crore as against Rs 19,207 crore in the previous year, the Chairman, Mr V.S. Jain, told reporters here.
SAIL earned a net profit of Rs 1,014 crore in the last quarter of 2003-04. In fact, the state-owned company notched up gains in every quarter of the last fiscal, achieving a net profit of Rs 255 crore in the first quarter, Rs 505 crore in the second and Rs 738 crore in the third.
The company wiped out its entire accumulated losses of Rs 2,765 crore, Mr Jain said. The company has, however, not announced any dividend.
Going forward, Mr Jain said SAIL would increase its installed capacity from 12.5 million tonnes at present to 20 million tonnes by 2010. He did not put a figure on the company's long-term investment plans.
The SAIL Chairman said the total capital expenditure in the current year would be in the region of Rs 1,500 crore-Rs 2,000 crore as against Rs 1,300 crore last year. Investment plans for the current year are being finalised, he said.
The company managed to dramatically bring down its debt-equity ratio from 6.5:1 as on March 31, 2003, to 1.86:1 at the end of the recently concluded fiscal. "We want to maintain our debt-to-equity ratio at 1:1 and do not plan to raise huge funds," he said.
SAIL brought down its external borrowing by Rs 4,239 crore to Rs 8,689 crore by March 2004 while downsizing its manpower by 5,500 to bring the workforce to about 1.32 lakh at the beginning of the current fiscal. Financial restructuring helped the company reduce its interest burden by Rs 435 crore during the year.
Mr Jain attributed the company's improved performance to restructuring, better product mix, higher capacity utilisation at 104 per cent and a buoyant market.
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