May 29, 2010 - Recently anointed a Maharatna company by the Government of India Steel Authority of India Limited took on record its audited financial performance for January to March of FY' 10 showing profit after tax of INR 2,085 crore, with an improvement of 40% YoY. The company achieved net sales turnover of INR 11,955 crore during the quarter, as against INR 11,790 crore in the corresponding period last year. SAIL's Q4 profit before tax at INR 3,067 crore reflected 34% YoY growth.
The company's improved profitability in Q4 was mainly due to market oriented product mix, 37% increase in production of value added steels and several cost efficiency measures. Improved sales realization during the quarter and reduction in cost of some inputs like imported coking coal and ferroalloys also boosted the bottomline.
Progressive improvement in profitability in every successive quarter of FY' 10 helped SAIL to achieve PBT of INR 10,132 crore during the year, higher by 8% its second highest profit since inception. PAT for the whole financial year has been higher by 9.5% at INR 6,754 crore. In spite of sales growth of 7% during FY' 10 in volume terms at 12.11 million tonnes, of which one-third constituted value-added items, net turnover at INR 40,551 crore was lower by about 6% as compared to the previous year, primarily on account of lower net sales realizations, especially in the first half.
Highlights of Q4
1. Q4 net sales exceeds INR 11,900 crore
2. Record 37% higher value-added steel production in Q4 boosts profitability
3. CAPEX 45% higher in Q4 at INR 2894 crore; doubles to over INR 10,600 crore for full year.
4. FY' 10 PBT over INR 10000 crore grows by 7%, 2nd highest since inception
5. Final dividend of 17% to shareholders totaling 33% for the year.
The SAIL Board has recommended final dividend payment to company shareholders at 17% of paid up equity, with total dividend payout for the year 2009-10 at 33% amounting to INR 1,363 crore.
During FY' 10, the SAIL plants produced 14.5 million tonnes of hot metal and 13.5 million tonnes of crude steel and 12.6 million tonnes of saleable steel. With demand for special and value-added steels rising, SAIL continued its special thrust on production of value-added and special steel products. This resulted in production of value-added products reaching a record level of 4.6 million tonnes, a growth of 24% over FY' 09.
Under SAIL's modernization & expansion plan, capital expenditure at INR 2,894 crore in Q4 was 45% higher than INR 2,002 crore in CPLY. During FY' 10, the company's CAPEX touched INR 10,606 crore more than twice the previous year. Modernization & expansion projects at Salem Steel Plant which involve installation of new steel making facilities and a new cold rolling mill are ready to be commissioned shortly. Several stand alone projects have been commissioned during the year, namely new slab caster with RH degasser and ladle furnace and rebuilt Coke Oven Battery-5 at Bhilai, augmented coking coal storage facilities at Bokaro, rebuilt Coke Oven Battery-4 and new coke oven gas holder at Rourkela, as well as a new bloom caster at VISL.
To meet CAPEX requirements for maintaining the schedule for modernization & expansion, SAIL increased its market borrowings by over INR 8,900 crore during FY' 10. On March 31st 2010, the company's total borrowings stood at INR 16,511 crore, taking its debt-equity ratio to 0.49:1. However, the company's cash reserves in term deposits stood at over INR 22,000 crore as on March 31st 2010.
During the year, several cost efficiency and administrative measures resulted in savings of over INR 2,000 crore during the year. Improvement in major techno-economic parameters best-ever coke rate, lowest-ever energy consumption and 4% improvement in blast furnace productivity contributed substantially to cost savings.
SAIL's thrust towards optimization of human resource resulted in overall reduction in employee strength by about 6,000, primarily on account of natural separation, even after fresh intake of about 1,800. As a result, labour productivity in SAIL plants in FY' 10 went up to 226 tonnes per man year, highest since inception.
FY' 10 was a milestone year for SAIL in terms of obtaining raw material security. After more than two decades of intense efforts, the company secured mining lease of Rowghat mines in Chhattisgarh in October' 09. Rowghat, with estimated reserves of 500 million tonnes of iron ore, will meet Bhilai Steel Plant's needs for the next 30 years. The process for setting up a 14 million tonnes per annum state of the art mining facility at Rowghat has been initiated by the company. SAIL also obtained in-principle clearance in October' 09 from the Jharkhand government for renewal of the Budhaburu lease in Chiria/Gua, which has a reserve of about 810 million tonnes of iron ore. The detailed project report for setting up a 7 MTPA mining facility here is also underway.
A number of new strategic initiatives and alliances also made FY' 10 significant for SAIL. Erstwhile Bharat Refractories Limited was merged with SAIL in July' 09 and renamed as SAIL Refractory Unit. The company also acquired the assets of Malvika Steel Limited at Jagdishpur in Uttar Pradesh and in the initial stage would put up a 175,000 tonne capacity TMT bar production facility, crash barriers and corrugation plant. A joint venture agreement was also signed with Shipping Corporation of India to set up a shipping company to initially handle a part of SAIL's coal import needs. SAIL is also exploring setting up joint ventures with other steel majors.
SAIL's established fundamental strengths received wide recognition in the form of awards and accolades during the year, including four SCOPE/DPE awards presented by the Prime Minister in October' 09, the maximum number among PSUs. Employees of the company also bagged the highest number of Shram and Vishwakarma national awards. The PM's Trophy for Best Integrated Steel Plant for the years 2006-07 and 2007-08, announced during FY'10, were bagged by Bhilai Steel Plant of SAIL.
Mr SK Roongta chairman of SAIL commented that conferring of Maharatna status by the Government and on the global front, too, SAIL getting a prominent position having been ranked at No 2 in the World-Class Steel Makers Ranking' by World Steel Dynamics, demonstrate the basic strengths of SAIL and have been possible due to the SAIL collective always converting challenges into opportunities.
The company's improved profitability in Q4 was mainly due to market oriented product mix, 37% increase in production of value added steels and several cost efficiency measures. Improved sales realization during the quarter and reduction in cost of some inputs like imported coking coal and ferroalloys also boosted the bottomline.
Progressive improvement in profitability in every successive quarter of FY' 10 helped SAIL to achieve PBT of INR 10,132 crore during the year, higher by 8% its second highest profit since inception. PAT for the whole financial year has been higher by 9.5% at INR 6,754 crore. In spite of sales growth of 7% during FY' 10 in volume terms at 12.11 million tonnes, of which one-third constituted value-added items, net turnover at INR 40,551 crore was lower by about 6% as compared to the previous year, primarily on account of lower net sales realizations, especially in the first half.
Highlights of Q4
1. Q4 net sales exceeds INR 11,900 crore
2. Record 37% higher value-added steel production in Q4 boosts profitability
3. CAPEX 45% higher in Q4 at INR 2894 crore; doubles to over INR 10,600 crore for full year.
4. FY' 10 PBT over INR 10000 crore grows by 7%, 2nd highest since inception
5. Final dividend of 17% to shareholders totaling 33% for the year.
The SAIL Board has recommended final dividend payment to company shareholders at 17% of paid up equity, with total dividend payout for the year 2009-10 at 33% amounting to INR 1,363 crore.
During FY' 10, the SAIL plants produced 14.5 million tonnes of hot metal and 13.5 million tonnes of crude steel and 12.6 million tonnes of saleable steel. With demand for special and value-added steels rising, SAIL continued its special thrust on production of value-added and special steel products. This resulted in production of value-added products reaching a record level of 4.6 million tonnes, a growth of 24% over FY' 09.
Under SAIL's modernization & expansion plan, capital expenditure at INR 2,894 crore in Q4 was 45% higher than INR 2,002 crore in CPLY. During FY' 10, the company's CAPEX touched INR 10,606 crore more than twice the previous year. Modernization & expansion projects at Salem Steel Plant which involve installation of new steel making facilities and a new cold rolling mill are ready to be commissioned shortly. Several stand alone projects have been commissioned during the year, namely new slab caster with RH degasser and ladle furnace and rebuilt Coke Oven Battery-5 at Bhilai, augmented coking coal storage facilities at Bokaro, rebuilt Coke Oven Battery-4 and new coke oven gas holder at Rourkela, as well as a new bloom caster at VISL.
To meet CAPEX requirements for maintaining the schedule for modernization & expansion, SAIL increased its market borrowings by over INR 8,900 crore during FY' 10. On March 31st 2010, the company's total borrowings stood at INR 16,511 crore, taking its debt-equity ratio to 0.49:1. However, the company's cash reserves in term deposits stood at over INR 22,000 crore as on March 31st 2010.
During the year, several cost efficiency and administrative measures resulted in savings of over INR 2,000 crore during the year. Improvement in major techno-economic parameters best-ever coke rate, lowest-ever energy consumption and 4% improvement in blast furnace productivity contributed substantially to cost savings.
SAIL's thrust towards optimization of human resource resulted in overall reduction in employee strength by about 6,000, primarily on account of natural separation, even after fresh intake of about 1,800. As a result, labour productivity in SAIL plants in FY' 10 went up to 226 tonnes per man year, highest since inception.
FY' 10 was a milestone year for SAIL in terms of obtaining raw material security. After more than two decades of intense efforts, the company secured mining lease of Rowghat mines in Chhattisgarh in October' 09. Rowghat, with estimated reserves of 500 million tonnes of iron ore, will meet Bhilai Steel Plant's needs for the next 30 years. The process for setting up a 14 million tonnes per annum state of the art mining facility at Rowghat has been initiated by the company. SAIL also obtained in-principle clearance in October' 09 from the Jharkhand government for renewal of the Budhaburu lease in Chiria/Gua, which has a reserve of about 810 million tonnes of iron ore. The detailed project report for setting up a 7 MTPA mining facility here is also underway.
A number of new strategic initiatives and alliances also made FY' 10 significant for SAIL. Erstwhile Bharat Refractories Limited was merged with SAIL in July' 09 and renamed as SAIL Refractory Unit. The company also acquired the assets of Malvika Steel Limited at Jagdishpur in Uttar Pradesh and in the initial stage would put up a 175,000 tonne capacity TMT bar production facility, crash barriers and corrugation plant. A joint venture agreement was also signed with Shipping Corporation of India to set up a shipping company to initially handle a part of SAIL's coal import needs. SAIL is also exploring setting up joint ventures with other steel majors.
SAIL's established fundamental strengths received wide recognition in the form of awards and accolades during the year, including four SCOPE/DPE awards presented by the Prime Minister in October' 09, the maximum number among PSUs. Employees of the company also bagged the highest number of Shram and Vishwakarma national awards. The PM's Trophy for Best Integrated Steel Plant for the years 2006-07 and 2007-08, announced during FY'10, were bagged by Bhilai Steel Plant of SAIL.
Mr SK Roongta chairman of SAIL commented that conferring of Maharatna status by the Government and on the global front, too, SAIL getting a prominent position having been ranked at No 2 in the World-Class Steel Makers Ranking' by World Steel Dynamics, demonstrate the basic strengths of SAIL and have been possible due to the SAIL collective always converting challenges into opportunities.
