Steel Authority of India (SAIL) Q4 97/98 earnings summary

Executive summary

• FY1997-98 turnover rose to Rs.14,624.07 crore from Rs.14,114.01 crore, while net profit fell to Rs.132.99 crore from Rs.515.17 crore, mainly on higher interest and depreciation.

• Operating profit (PBDIT) was broadly steady at Rs.2,497.21 crore versus Rs.2,458.21 crore; statutory auditors said specified qualifications would turn reported PBT of Rs.148.59 crore into a loss of Rs.276.94 crore.

Financial highlights

• Sales were Rs.14,624.07 crore versus Rs.14,114.01 crore; PBT was Rs.148.59 crore versus Rs.588.03 crore, and PAT was Rs.132.99 crore versus Rs.515.17 crore.

• Interest and finance charges increased to Rs.1,553.76 crore from Rs.1,179.48 crore; depreciation was Rs.794.86 crore versus Rs.690.70 crore.

• Board recommended a 1% dividend of Rs.41.30 crore and proposed transferring Rs.331.58 crore to the Bond Redemption Reserve.

• Reported profit benefited from accounting changes, including Rs.61.79 crore from capitalised trial-run expenditure, Rs.118.57 crore from depreciation changes, Rs.85.39 crore from leave provision write-back, and Rs.159.78 crore from inventory costing.

Outlook and guidance

• Priorities included faster cost reduction, improved customer orientation and quality, higher net sales realisation, greater high-value product sales, better asset utilisation, continued exports, and manpower rationalisation through VRS.

• Durgapur modernisation was complete, with benefits expected to rise in future years; further modernisation at Rourkela, Bokaro and Bhilai was progressing, with efficiency and capacity gains expected on completion.

• A 40,000-tonne-per-year hot-dip galvanising line at Dagaon, Assam, was being set up; site activities had started.