Indian govt owned SAIL (Steel Authority of India Limited) has recently announced its financial and operational results for Q1 FY ‘21. Major key takeaways of its investor conference call are mentioned below-
- Crude steel production dropped by 37% in Q1- The company’s crude steel production plunged by 37% to 2.47 mn t in Q1 FY ’21 against 3.93 mn t in Q1 FY ’20. On a quarterly basis, it fell by 43% as compared with 4.31 mn t in Q4 FY ’20. Production has been severely affected on account of COVID-19 impact during Q1 FY ’21.
- Hot metal output falls- The manufacturer churned out 2.68 mn t of hot metal in Q1 FY ’21, declining significantly by 38% compared with 4.32 mnt in Q1 of the previous fiscal.
- Saleable steel production decreased by 37% in Q1- Company’s saleable steel production witnessed a significant decline of 37% and stood at 2.29 mn t in Q1 as against 3.65 mn t in Q1 FY ’20.
- Saleable steel sales also decline- Company’s saleable steel sales stood at 2.24 mn t in Q1, as compared to 3.25 mn t in the corresponding quarter of FY ’20.
- Company reported consolidated net loss in Q1- The company posted a consolidated net loss of INR 1,226.47 Cr in Q1 FY’21, mainly on account of reduced income. Also EBIDTA reported a loss of INR 125 Cr, down by a whopping 102% in contrast with INR 6,917 Cr in the previous quarter. The stagnation in the economy due to the increasing COVID infection concerns during the quarter. On yearly basis, the fall was a massive -107% compared with INR 1,765 Cr in Q1 FY ’20.
- Company’s exports stood over 0.5 mn t in Q1 FY ’21- Domestic demand was severely impacted on account of COVID-19. However, SAIL seized the opportunity available in the international market by exporting about 5.38 lakh tonnes during Q1 FY 21 as against 2.43 lakh tonnes during CPLY, a growth of 122%.
- Reduction in export allocation with recovering domestic demand- Company has reported export allocations for FY ‘21 to be around 2.5 mn t. Out of which 1 mn t has been exported in the first five months of this fiscal. The company is primarily focusing on fulfilling the nation’s domestic demand and aiming to reduce export allocations.
- Finished-steel inventories decline to 1.23 mnt in end-Aug ’20- Company has reported a finished steel inventory of 1.23 mn t as on 31 Aug ’20. Inventories have come down as against 1.7 mn t on 31 Mar ’20 and 1.65 mn t as on 30 Jun ’20.
- Permission on the auction of iron ore dump stands awaited- SAIL is yet to receive permission for the sale of the iron ore dump from the respective state governments, officials informed in today’s quarterly conference call. However, the company has started sales of fines from Chhattisgarh mines in Sep ’20, in addition to auctions being held from Odisha since Feb ’20. The company has sold roughly 600,000 – 650,000 t iron ore fines so far.
- Domestic price realization to improve up to INR 3,500/t in Q2 FY ’21- With the recovery in India’s domestic steel market in Q2 FY ’21, steel prices have seen a rebound since Aug ’20. Average price realizations are expected to be higher by INR 3,000-3,500/t ($41-47) in Q2 FY ’21 against Q1 FY ’21.
- Improved demand in the domestic market- The domestic markets are also looking up quite positively now. SAIL has again led the market by notching up its best-ever performance for the months of June, July and August. Also, company officials shared that after the end of monsoon season demand in the construction sector will pick up, which may result in a hike in rebar prices.
Note- The graph has been corrected.
Leave a Reply