Indian Govt. owned SAIL (Steel Authority of India Limited) has announced its financial and operational results for Q3 FY’21 and 9M FY’21. On a quarterly basis, hot metal production was up by 16% to 4.80 mn t while saleable steel production spiked by 11% to 4.15 mn t in Q3 FY ’21. Sales volumes recorded at 4.32mn t increased by 3% compared to the previous quarter.
Major takeaways of the investor conference call:
1.Company targets 17 mn t sales guidance for next fiscal
Company announced that it is eyeing to achieve 17 mn t in saleable steel sales and around 20 mn t in hot metal production in FY’22.
2.SAIL posts splendid Q3 earnings
Company reported a significant increase in its key performance indicators for Q3 FY’21. The Company’s EBITDA stands at INR 5,294 cr, up by a humongous 346% annually, while PAT grew by a whopping 398% annually to INR 1,283 cr.
3.Operational performance
The focus on operational efficiency also resulted in improvement in the key techno-economic parameters during 9M FY’21. Coke Rate 454kg/t, Blast Furnace Productivity at 1.78 T/m3/Day and Specific Energy consumption 6.59 G.Cal/TCS were impressive.
4.Expect iron ore sales to pick up in Q4 FY’21
SAIL recorded iron ore sales of around 1.2 mn t in Q3 FY’21 vis-a-vis 0.5 mn t in Q2. The company expects sales volume to rise to 2 mn t in Q4. The company continues to await some approvals from the Jharkhand Govt. which once resolved will push sales monthly volumes to 1mn t.
5.Coking coal prices are expected to soften-
Imported coking coal prices stood around $135/t FoB Australia last week. SAIL expects it to touch around $125/t Fob basis in the near term. Few coking coal deals have been booked at higher prices recently but the company is expecting that higher levels will not sustain for long.
6.Net sales realization improves in Q3 FY’20-
In long steel net sales realization was around INR 39,360/t in Q3FY’20 which has now touched INR 46,000/t in Jan ’21. Similarly, in flats, net sales realization was at INR 43,000/t in Q3 and touched to INR 50,574/t in Jan’21
7.Reduction in price gap-
Company in its recent investors’ call mentioned that the price gap between primary and secondary players has touched around INR 8000-9000/t when prices were increasing significantly. However, this gap is expected to reduce by around INR 3000-4000/t in the near term amid softness in long steel prices.
8.Maintenance shutdown in IISCO plant-
IISCO plant is planning a maintenance shut down for around 20 days in two phases:10 days in Mar’21 and 10 days in Apr’21.
Better outlook in Q4
Company expects better results and performance in Q4 FY’21 in terms of prices. The benefit of imported coking coal at cheaper prices will continue to impact in Q4 also. Meanwhile, boost in demand from infrastructure and construction will help SAIL to better its numbers in upcoming quarters.
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