Steel Authority of India (SAIL) Q4 04/05 earnings summary

Executive summary

• FY2004-05 delivered record turnover of ₹31,800 crore, PBT of ₹9,365 crore and PAT of ₹6,817 crore; crude steel output reached a record 12.1 Mt.

• Earnings gains reflected stronger domestic sales, improved product mix and steel-market conditions, cost savings and lower interest expense.

• Borrowings fell ₹2,920 crore; with ₹5,670 crore in short-term bank deposits, the balance sheet was described as virtually debt free.

Financial highlights

• Turnover rose 32% YoY to ₹31,800 crore; PBT increased 256% to ₹9,365 crore and PAT rose 171% to ₹6,817 crore.

• EBDIT was ₹11,097 crore versus ₹4,652 crore; interest and finance charges declined to ₹605 crore from ₹901 crore.

• Domestic sales were 10.3 Mt, up 9% YoY; value-added special-quality steel sales increased 38%.

• Operating cash flow reached ₹8,899 crore; year-end cash and bank balances were ₹6,132 crore.

Outlook and guidance

• Corporate Plan 2012 targets ~20 Mt of hot-metal production through debottlenecking and selective investment, alongside higher finished-steel mix and stronger cost and quality competitiveness.

• Growth opportunities were tied to infrastructure, construction, auto, oil and gas, and cold-reducing demand; low per-capita steel use was cited as room for market expansion.

• Demand outlook was positive, but returns remained exposed to international price movements, rising input costs and infrastructure constraints.