Steel Authority of India (SAIL) Q4 03/04 earnings summary

Executive summary

• FY03-04 delivered record turnover of Rs. 24,178 crore, up 26% YoY, and PAT of Rs. 2,512 crore versus a Rs. 304 crore loss; accumulated losses were eliminated.

• Improved volumes, product mix, cost control, lower debt and stronger steel prices drove the turnaround; no dividend was recommended.

Financial highlights

• PBT reached Rs. 2,628 crore versus a loss of Rs. 316 crore; PBDIT was Rs. 4,650 crore versus Rs. 2,164 crore.

• Mild-steel sales were 10.43 MT, including exports of 1.14 MT, up 34% YoY; total sales turnover grew 26%.

• Production of saleable steel exceeded 11 MT for the first time, up 7% YoY; average capacity utilization was about 104%.

• Total production cost fell about 4% YoY despite higher input prices; wage-revision arrears of Rs. 1,417.79 crore were paid or provided.

Outlook and guidance

• FY04-05 priorities: maximize output at major plants, raise value-added production and increase special-steel output; maintain an international-market presence while focusing mainly on domestic sales.

• Corporate plan targets 20 MT of hot metal by FY11-12 through debottlenecking and brownfield expansion, funded mainly from internal accruals; capital spending is expected to rise.

• Steel demand was expected to remain supported by infrastructure and industrial projects; management anticipated the positive domestic outlook to continue into the coming year.