Essar Steel back in black; posts profit of Rs 648 cr in FY15

Ruias-promoted Essar Steel today posted a net profit of Rs 648 crore for the full fiscal ended March 31, helped by better operating margins, consolidation and higher demand for its value added steel products.
The Mumbai-based company had posted a net loss of Rs 1,597.14 crore in the year-ago period, it said in a statement.
Gross revenue of the firm rose by 19.6 per cent to Rs 17,162 crore in the fiscal from Rs 14,348 crore in the 2013-14 financial year, it added.
Essar Steel posted net loss in the last three years.
"Operating margins doubled to 18 per cent in fiscal 2014- 15 as compared to 9 per cent in FY 2013-14 due to various innovations and cost cutting measures in spite of a richer product mix," the firm said.

The company added that dollarisation of USD 2.2 billion helped in reducing its finance cost from 12 per cent to 9 per cent as well as increased the maturity period.

Moreover, the monetisation of the Odisha Slurry Pipeline and Oxygen plant for around Rs 4,850 crore also helped Essar Steel in firming up its balance sheet.
Besides, its holding company infused about Rs 1,300 crore in the firm, it added.
The company also plans to monetise Vizag Slurry pipeline and Coke Oven for around Rs 7,000 crore in the 2015-16.
It said these measures will provide the firm with around "Rs 12,000 crore, which will be utilised to strengthen the balance sheet and meet all its financial needs."

Essar Steel India Executive Vice Chairman Firdose Vandrevala said: "Essar Steel has completed all major projects at a competitive cost. The company's strategy to focus on value-added products, introducing new products, improved operating margins and cost saving, has aided the improved performance of the company."
For the fiscal 2014-15, total expenditure incurred stood at Rs 11,733 crore as against Rs 12,480 crore in 2013-14.
The firm's finance cost came down by 7.44 per cent to Rs 3,865 crore compared with Rs 4176.4 crore year ago.
"Despite negative impact of lower prices due to rising imports, the company was able to get a premium on its products over market prices," the company said.

Lower input prices of basic raw material also helped the firm's balance sheet, it said.
Sales volume of steel products stood at 3.31 million tonnes (MT), which is marginally up by 2 per cent compared with 3.24 MT in 2013-14.
Essar Steel sold 2.76 MT in the domestic market and 0.56 MT in the export market.