Steel Authority of India (SAIL) Q4 00/01 earnings summary

Executive summary

• FY 2000-01 net loss narrowed to Rs.728.66 crore from Rs.1,720.02 crore; turnover was nearly flat at Rs.16,232.63 crore.

• Improved steel price realization and cost controls supported results, while a Rs.286.89 crore power-plant disposal gain and significant leave and wage provisions affected comparability.

Financial highlights

• Turnover Rs.16,232.63 crore vs Rs.16,250.16 crore; operating profit (PBDIT) Rs.2,167 crore vs Rs.1,202 crore.

• Net loss after tax Rs.728.66 crore vs Rs.1,720.02 crore; interest Rs.1,751.68 crore and depreciation Rs.1,143.62 crore.

• Average price realization improved ~9%; mild-steel sales were 8.755 MT vs 9.068 MT, and saleable-steel exports were 0.476 MT.

• Cost-control measures generated ~Rs.525 crore in savings; stores and spares inventory fell Rs.130 crore.

Outlook and guidance

• FY 2001-02 domestic steel-consumption growth was expected to exceed 6%; infrastructure, construction, housing and pipeline demand were identified as potential supports.

• Continued weak international prices and flat-steel oversupply could constrain domestic realizations; the restructuring plan targeted lower costs and improved competitiveness.

• Further high-cost debt retirement was expected to reduce financing costs; non-core asset divestments and manpower reduction remained central to restructuring.