Steel Authority of India Ltd (SAIL) has registered 21 % growth in net sales revenue which stood at INR 13,442 crore for the second quarter of FY17-18 (Q2FY18) as against INR 11,080 in the corresponding period of last fiscal.
SAIL’s emphasis on increasing the share of high value products in its basket has begun to positively influence revenue earnings. The maharatna PSU recorded 4% growth in domestic sales in H1FY18 (April-September 17) with 21 % improvement in sales of high value products like Cold Rolled and galvanized products. There has also been a size-able 30 % improvement in sales of railway products during H1 of FY18.
Registering positive EBITDA (earnings before interest, taxes, depreciation and amortisation) for the sixth consecutive quarter, SAIL achieved EBITDA of INR 967 crore before exceptional expenses in Q2 of FY18, recording a growth of more than 400 % against an EBITDA of INR 192 crore during the same period of last fiscal, and posting a cash profit pre-depreciation and exceptional items of INR 323 crore in Q2 of FY18.
Notably, the EBITDA for Q2 of FY18 is higher than of the entire fiscal 2016-17. SAIL’s EBITDA margin to net sales revenue ratio stands at 7.1 % in Q2 of FY18 as against 1.7% in the comparable period of FY17, indicating higher efficiency across the production processes and value chain.
The company reduced its losses by registering 26 % improvement in PAT which stood at INR (-) 539 crore in Q2 of FY18 as against INR (-) 732 crore over the corresponding period of FY17. Despite improved sales revenue, earnings were impacted by huge rise in imported coal price, which partially negated the higher accruals. In order to neutralize the rise in input costs, the Company is continually ramping up production from new facilities.
Simultaneously, the company is optimizing the utilization of its finishing facilities to increase the high value product offerings for better market realization. Specific branding of products from the new mills is also one of the steps towards this.
SAIL’s operational performance also exhibited good numbers In Q2 of FY18, registering the highest ever quarterly saleable steel production at 3.659 MnT and surpassing the previous best of 3.626 MnT achieved in Q4FY16-17, with growth of 5% over last fiscal and 14 % over preceding quarter in the current financial year.
On the important techno-economic parameters, SAIL achieved the best ever quarterly Coke rate of 459 kg/thm which is lower by 5 % over the same period in FY17. Cold Dust Injection (CDI) improved by 33 % and Blast Furnace (BF) productivity was higher by 4 %.
Reiterating the need to change product mix to make way for more value added and differentiated products, Chairman, SAIL, PK Singh said, “Our focus on reducing operating cost of assets, prudent finance management, efficient production process and increased share of value added and branded products is beginning to show results. The products from our modernized mills will continue to claim a large share of steel usage in several national infrastructure projects. In line with the Government’s strategies for improving infrastructure, SAIL is aiming to supply large quantities of steel in prestigious projects including Sagarmala, upcoming Bharatmala project and railway expansion etc.”
“As part of SAIL’s turnaround initiatives, our continuous large group communication exercises across units have helped embed our priorities in the Company’s collective psyche, which will keep strengthening SAIL’s foundations for profitable growth”, he added.
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