SAIL in black, net at Rs 738 crore

Steel Authority of India (SAIL) has reported a net profit of Rs 737.95 crore in the third quarter ended December 31, 2003, as against a loss of Rs 78.75 crore in the corresponding quarter of the previous financial year.

SAIL chairman V.S. Jain said he expected accumulated losses to reduce to around Rs 1,200 crore at the end of the third quarter to be wiped out completely in 2004-05. "Though steel demand is growing up and looks stable for at least a year, prices of coking coal and shipping/freight is posing some threat," he said.

The company's sales (income from operations) for the quarter grew 33 per cent from Rs 5,025.25 crore in the same period last year to Rs 6,684.29 crore.

Jain said the company benefitted as much as Rs 400 crore in sales due to higher production and Rs 175 crore on account of various cost cutting measures including manpower reduction and increased efficiencies at production stages "" the total cost of production has been reduced by 3.5 per cent.

It also accrued around Rs 325 crore on account of lower interest rates on reduced loans. Jain also said SAIL was now on a growth trajectory as domestic demand was on the upswing and prices were firming up.

New investments worth Rs 250-300 crore were cleared today by the board for the Bhillai steel plant. He added that in the next phase, SAIL will increase hot metal production by one million tonnes to 13 million tonne.

He said SAIL has had to cut exports to accomodate for domestic demand upswing. But there was no plan to completely neglect the exports markets which have been developed over several years.

In fact, exports for the last quarter grew 65 per cent as compared to 100 per cent last year. Jain said that average prices in the year to date were 12 per cent higher than last full year's price and 15 per cent higher year-on-year.

SAIL's nine month profits stood at Rs 1,498 crore, surpassing the highest-ever full year profit of Rs 1319 crore posted in 1995-96. It is also an upswing of Rs 2,000 crore from a loss of Rs 546 crore registered in the same period last year.

Additionally, SAIL's turnover in April-December touched an all-time high at Rs 16,934 crore, which is 29 per cent higher than Rs 13,097 crore registered in the first nine months of 2002-03.