Q4 turnover Rs. 13008 cr., PBT Rs. 2287 cr.
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Sales up 54% in Q4 over Q3
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Highest-ever turnover of Rs. 48681 cr. in FY ’09, PAT at Rs. 6175 cr.
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Final dividend to shareholders totalling 26% for the year (13% interim dividend paid)
New Delhi: SAIL recorded a profit (after tax) of Rs. 1,486.68 crore during Q4 of financial year 2008-09, in spite of the economic meltdown and rise in input costs. The profitability of the company during Q4 was 76% higher than the PAT in Q3 – though lower by 37% compared to the corresponding period of last year (CPLY). The company’s audited financial results for financial year 2008-09 were taken on record by the SAIL Board of Directors here today. The turnover in Q4 at Rs. 13,008 crore, EBDITA at Rs. 2,658 crore and PBT at Rs. 2,287 crore were lower by 16.2%, 34.1% and 37.6% over Q4 of 2007-08 but higher by 30.8%, 57.8% and 81.9% over Q3 of 2008-09, respectively.
In the face of severe slowdown faced by the steel industry globally in the second half of FY ’09, SAIL could achieve this performance due to several internal measures which helped in all round cost efficiency, higher production of value-added items, best-ever techno-economic parameters and continual improvement in productivity. Owing to improvement in domestic market conditions, domestic sales during Q4 bounced back – 50% higher as compared to Q3 of FY ’09, leading to significant reduction in stocks. Overall inventory of semis and finished steel and raw materials was brought down by about Rs. 2,800 crore during the quarter.
Continuing its thrust on value-added products, SAIL achieved highest-ever quarterly production of high quality rails at 2.63 lakh tonnes, which was 9% higher than CPLY. Production of higher grade TMT bars was up by 40%, tinplates by 72% and galvanised products by 7%. Techno-economic parameters achieved during Q4 were the best ever in any quarter with lowest ever coke rate of 509 kg/thm – an improvement of 3% over CPLY, while highest ever blast furnace productivity at 1.58 tonnes/cu.m./day was 4% better than CPLY. In a major cost saving effort, share of costlier imported coking coal in the blend was reduced by 5% and same was replaced with cheaper indigenous coking coal. All these measures could result in savings to the tune of over Rs. 750 crore during Q4 alone.
With the pick up in Q4, SAIL could achieve record turnover of Rs. 48,681 crore (equivalent to over $10 billion) in FY ’09 – 6.9% higher year-on-year (YOY). During the year, SAIL recorded profit (before tax) of Rs. 9,403.45 crore and profit (after tax) of Rs. 6,174.81 crore – both lower by 18% YOY. The total impact of higher input cost during the year amounted to over Rs. 7,000 crore, of which more than Rs. 6,000 crore was on account of coking coal.
The steel industry witnessed unprecedented developments during the year with prices of steel reaching historic peaks in the first half of the year, followed by a sharp drop in H-2 in the face of global economic meltdown. There were sharp increases in costs of major inputs, especially coking coal going up by over 200%.
The SAIL Board has recommended final dividend payment to company shareholders at 13% of paid-up equity, with total dividend payout (including interim dividend of 13%) for the year 2008-09 at 26% amounting to Rs. 1,073.9 crore.
During financial year 2008-09, SAIL produced 12.5 million tonnes of saleable steel by achieving 113% capacity utilisation. Production of hot metal at 14.4 million tonnes and of crude steel at 13.4 million tonnes was maintained at the previous year’s levels. Production through the energy-efficient continuous casting route was highest ever at 66% of crude steel. Product-mix improved significantly with 11% growth over the previous year; share of value-added steel in overall production grew to 30% during the year as compared to 27% in 2007-08. Techno-economic parameters achieved during 2008-09 have been best ever so far. Improvements were recorded in all major indices – coke rate at 521 kg/thm (2%) and specific energy consumption at 6.74 Gcal/tcs (3%).
With best-ever sales of 4.45 million tonnes of long products, SAIL achieved total sales of 11.32 million tonnes during FY ’09. Supplies to projects of national importance reached a new high during the year with sales to the power sector, telecom sector and the Railways growing by 44%, 58% and 4% respectively. The company’s distribution network was further expanded – SAIL having the unique distinction of being present in every district of the country, with 2,500 authorised dealers. Sales of reinforcement steel for construction through the dealer network was at 5.2 lakh tonnes, going up by 50% over CPLY. With a view to provide value-added steel for general construction, production of higher grade earthquake resistant steel was commercialised during the year, with 90% of total TMT bar production now in this quality.
The thrust on rationalising manpower continued during the year. There was an overall reduction of over 7,500 in the company’s manpower strength during 2008-09 after accounting for around 1,300 fresh additions to improve skill and age-mix. This brought down SAIL’s manpower further to 121,295 as on 31st March 2009. This thrust will continue in the current year as well. The company has made full provision to the tune of over Rs. 5,000 crore on account of wage revisions which are due with effect from 1.1.07, in its financial accounts for the year 2007-08 and ’08-09.
Capital expenditure by the company during 2008-09 touched Rs. 5,233 crore – 2.5 times higher than in the previous year. It is expected that capex in the current year may touch Rs. 10,000 crore. To meet the ongoing modernisation & expansion schemes, SAIL raised Rs. 735 crore from the market through long-term bonds during 2008-09. SAIL’s debt-equity ratio as on 31.3.09 is 0.27:1 compared to 0.13:1 as on 31.3.08. Major units commissioned during the year include 250 MW power plant in joint venture with NTPC at Bhilai; a second unit of 250 MW is likely to go onstream in the current financial year. Construction of 2.2 million tonne slag-based cement plant as JV is in full progress and the plant is likely to be commissioned within a year. Slab caster along with secondary steel making facilities at Bhilai, oxygen plant and cold dust injection in two blast furnaces at Durgapur, pipe coating plant at Rourkela, upgradation of Hot Strip Mill and oxygen plant at Bokaro were also commissioned during the year.
The above performance has been achieved in the backdrop of the company holding its price line for three months in H-1 of FY ’09, when market conditions were buoyant, and coping with unprecedented rise in input costs, higher manpower costs and the adverse impact of global meltdown in H-2.
Commenting on the company’s performance, Mr. S.K. Roongta, Chairman, SAIL, said: "SAIL has proved its resilience in facing the challenges thrown up due to unprecedented developments in the steel industry and overall business environment. The revival in steel demand began in Q4 and trends in the current quarter are also encouraging. With major boost to infrastructure building in the offing, we expect steel demand in the country to grow further in the current financial year."
In the face of severe slowdown faced by the steel industry globally in the second half of FY ’09, SAIL could achieve this performance due to several internal measures which helped in all round cost efficiency, higher production of value-added items, best-ever techno-economic parameters and continual improvement in productivity. Owing to improvement in domestic market conditions, domestic sales during Q4 bounced back – 50% higher as compared to Q3 of FY ’09, leading to significant reduction in stocks. Overall inventory of semis and finished steel and raw materials was brought down by about Rs. 2,800 crore during the quarter.
Continuing its thrust on value-added products, SAIL achieved highest-ever quarterly production of high quality rails at 2.63 lakh tonnes, which was 9% higher than CPLY. Production of higher grade TMT bars was up by 40%, tinplates by 72% and galvanised products by 7%. Techno-economic parameters achieved during Q4 were the best ever in any quarter with lowest ever coke rate of 509 kg/thm – an improvement of 3% over CPLY, while highest ever blast furnace productivity at 1.58 tonnes/cu.m./day was 4% better than CPLY. In a major cost saving effort, share of costlier imported coking coal in the blend was reduced by 5% and same was replaced with cheaper indigenous coking coal. All these measures could result in savings to the tune of over Rs. 750 crore during Q4 alone.
With the pick up in Q4, SAIL could achieve record turnover of Rs. 48,681 crore (equivalent to over $10 billion) in FY ’09 – 6.9% higher year-on-year (YOY). During the year, SAIL recorded profit (before tax) of Rs. 9,403.45 crore and profit (after tax) of Rs. 6,174.81 crore – both lower by 18% YOY. The total impact of higher input cost during the year amounted to over Rs. 7,000 crore, of which more than Rs. 6,000 crore was on account of coking coal.
The steel industry witnessed unprecedented developments during the year with prices of steel reaching historic peaks in the first half of the year, followed by a sharp drop in H-2 in the face of global economic meltdown. There were sharp increases in costs of major inputs, especially coking coal going up by over 200%.
The SAIL Board has recommended final dividend payment to company shareholders at 13% of paid-up equity, with total dividend payout (including interim dividend of 13%) for the year 2008-09 at 26% amounting to Rs. 1,073.9 crore.
During financial year 2008-09, SAIL produced 12.5 million tonnes of saleable steel by achieving 113% capacity utilisation. Production of hot metal at 14.4 million tonnes and of crude steel at 13.4 million tonnes was maintained at the previous year’s levels. Production through the energy-efficient continuous casting route was highest ever at 66% of crude steel. Product-mix improved significantly with 11% growth over the previous year; share of value-added steel in overall production grew to 30% during the year as compared to 27% in 2007-08. Techno-economic parameters achieved during 2008-09 have been best ever so far. Improvements were recorded in all major indices – coke rate at 521 kg/thm (2%) and specific energy consumption at 6.74 Gcal/tcs (3%).
With best-ever sales of 4.45 million tonnes of long products, SAIL achieved total sales of 11.32 million tonnes during FY ’09. Supplies to projects of national importance reached a new high during the year with sales to the power sector, telecom sector and the Railways growing by 44%, 58% and 4% respectively. The company’s distribution network was further expanded – SAIL having the unique distinction of being present in every district of the country, with 2,500 authorised dealers. Sales of reinforcement steel for construction through the dealer network was at 5.2 lakh tonnes, going up by 50% over CPLY. With a view to provide value-added steel for general construction, production of higher grade earthquake resistant steel was commercialised during the year, with 90% of total TMT bar production now in this quality.
The thrust on rationalising manpower continued during the year. There was an overall reduction of over 7,500 in the company’s manpower strength during 2008-09 after accounting for around 1,300 fresh additions to improve skill and age-mix. This brought down SAIL’s manpower further to 121,295 as on 31st March 2009. This thrust will continue in the current year as well. The company has made full provision to the tune of over Rs. 5,000 crore on account of wage revisions which are due with effect from 1.1.07, in its financial accounts for the year 2007-08 and ’08-09.
Capital expenditure by the company during 2008-09 touched Rs. 5,233 crore – 2.5 times higher than in the previous year. It is expected that capex in the current year may touch Rs. 10,000 crore. To meet the ongoing modernisation & expansion schemes, SAIL raised Rs. 735 crore from the market through long-term bonds during 2008-09. SAIL’s debt-equity ratio as on 31.3.09 is 0.27:1 compared to 0.13:1 as on 31.3.08. Major units commissioned during the year include 250 MW power plant in joint venture with NTPC at Bhilai; a second unit of 250 MW is likely to go onstream in the current financial year. Construction of 2.2 million tonne slag-based cement plant as JV is in full progress and the plant is likely to be commissioned within a year. Slab caster along with secondary steel making facilities at Bhilai, oxygen plant and cold dust injection in two blast furnaces at Durgapur, pipe coating plant at Rourkela, upgradation of Hot Strip Mill and oxygen plant at Bokaro were also commissioned during the year.
The above performance has been achieved in the backdrop of the company holding its price line for three months in H-1 of FY ’09, when market conditions were buoyant, and coping with unprecedented rise in input costs, higher manpower costs and the adverse impact of global meltdown in H-2.
Commenting on the company’s performance, Mr. S.K. Roongta, Chairman, SAIL, said: "SAIL has proved its resilience in facing the challenges thrown up due to unprecedented developments in the steel industry and overall business environment. The revival in steel demand began in Q4 and trends in the current quarter are also encouraging. With major boost to infrastructure building in the offing, we expect steel demand in the country to grow further in the current financial year."
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