SAIL net drops as costs rise

Income from operations declines 4.73% to Rs 10,267.91 crore from Rs 10,777.5 crore a year earlier

Country’s largest steel producing firm SAIL today posted 35.25% fall in its standalone net profit to Rs 450.91 crore during the first quarter ended June this year, owing to increased costs.

It had posted a profit of Rs 696.41 crore in the corresponding quarter previous year.

The income from operations declined 4.73% to Rs 10,267.91 crore from Rs 10,777.5 crore a year earlier, SAIL said .

The profitability was adversely affected due to a fall in net sales realisations (NSR) per tonne. "The sharp decline in NSR of 10.9% per tonne of steel in Q1FY'14 due to subdued market conditions adversely affected the profitability of SAIL, although record first-quarter production of 3.2 million tonnes of saleable steel was achieved," the company said.

SAIL's major plants, including Bhilai, Bokaro, Durgapur and Rourkela, recorded a fall in revenue.

Total expenditure at Rs 9,693.50 crore was higher than Rs 9,664 crore a year earlier due to a 15% increase in employee benefit expenses to Rs 2,294.79 crore. The finance costs grew by 53.6% to Rs 191.82 crore, while other income declined 18.78% to Rs 226.17 crore.

A company statement said that for the first time, manpower declined to below 100,000 as on 30.06.13, though the wage bill was higher due to provision for wage revision and actuarial impact.

SAIL also became instrumental in enabling India to become 5th nation in the world to have indigenous aircraft carrier (IAC), when INS Vikrant was launched on 12th August this year.

SAIL Chairman CS Verma said, “The much-awaited capacity addition in SAIL has taken concrete shape with the commencement of hot metal production from India’s largest operational blast furnace at our Rourkela steel plant. This ushers in, an era of quantum jump in SAIL’s production capacity, which will enable us fulfil the country’s growing demand of quality steel.”