Millennium Post

SAIL quarterly profit sails 9% to Rs579 crore

SAIL quarterly profit  sails 9% to Rs579 crore
The company had clocked Rs 533 crore net profit in the corresponding quarter of last fiscal, it said in a statement. “Improvement in profit was helped by factors such as enhanced production, better techno-economic parameters along with reduction in input cost particularly of imported coking coal,” Steel Authority of India said in a statement.

Like other domestic steel makers, SAIL mostly depends on imported coking coal which accounts for nearly 75 per cent of its need. The price of coking coal tumbled by 65 per cent in recent times from its peak in 2011 to $115 per tonne on higher supply and lower demand from China.

Turnover of the company, however, was lower by 3 per cent for the quarter at Rs 12,291 crore impacted by higher imports and nearly flat steel consumption in the country. “The turnover was adversely impacted due to prevailing challenging market conditions, fraught with high imports and consumption of steel remaining almost flat in the country,” it said. SAIL said its Board has approved 17.5 per cent interim dividend for the current fiscal which will involve a pay-out of Rs 870 crore including tax on dividends.

“Our initiatives taken to bring down energy consumption and optimise raw material utilisation, as well as adoption of state-of-the-art technologies have helped us improve the techno-economic parameters and stay viable in the current market scenario,” said SAIL Chairman C S Verma. “With new policies of the government and its thrust on steel intensive sectors, the steel demand is likely to rise. SAIL is ramping up its capacity to match this,” he added.

SAIL is raising its hot metal capacity from 13.8 million tonnes per annum to 23.4 mtpa with an investment of Rs 72,000 crore through brownfield route.

It has already operationalised projects worth Rs 32,000 crore till now. Shares of SAIL closed 2.45 per cent up at Rs 75.25 apiece on the BSE. Meanwhile, Spanish firm Tubacex has reached an agreement with Prakash Steelage Ltd to acquire 68 per cent stake in the Mumbai-based firm’s seamless stainless steel tube division for Rs 250 crore. “The acquisition of a majority stake in the seamless stainless steel division of Prakash Steelage is a step towards strengthening our presence in Asia,” Tubacex CEO Jess Esmors said.

“Tubacex’s Rs 250-crore investment will come as equity in a new joint venture company, which will be named at a later date, out of which Rs 200 crore will go to the parent company Prakash Steelage to repay debt, while Rs 50 crore will be used for the development of technology in the new joint venture,” Prakash Steelage Executive Director Ashok Seth said. The Rs 1,000-crore Prakash Steelage has about 250 employees and a turnover of about 25 million euros (Rs 175 crore) in its seamless stainless steel tube division.

“The acquisition is a strategic medium and long-term decision to enable us increase our presence in the market. The joint venture will be mutually beneficial for Tubacex and Prakash Steelage. It is expected to reinforce the growth of the stainless steel seamless tubes and pipes division,” Prakash Steelage Chairman and Managing Director Prakash Kanugo said.
PTI

PTI

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