Indian govt owned SAIL (Steel Authority of India Limited) has recently announced its financial and operational results for Q2 FY ‘21.
Major key takeaways of its investor conference call are mentioned below –
1.Crude steel production up by 55% in Q2– Company’s crude steel production increased significantly by 55% to 3.82 mn t in Q2 FY ’21 against 2.47 mn t in Q1 FY ’21.In H1 FY ’21, the crude steel production volume aggregated to 6.29 mn t, declining by 20% in comparison with 7.82 mn t in CPLY.
2.Hot metal output rose in Q2-The steel manufacturer churned out 4.13 mn t of hot metal in Q2 FY ’21, significantly up by 54% compared with 2.68 mnt in the preceding quarter. In H1 FY ’21, the hot metal production fell by 20% and stood at 6.81 mn t in comparison with 8.52 mn t in CPLY.
3.Saleable steel production increased by 64% in Q2– Company’s saleable steel production witnessed a significant jump of 64% and stood at 3.75 mn t in Q2 in contrast with 2.29 mn t in Q1 FY ’21. In H1 FY ’21, the production of saleable steel decreased by 16% to 6.03 mn t as against 7.22 mn t in H1 of previous fiscal.
4.Saleable steel sales nearly doubled in Q2-Company’s saleable steel sales went up by a whopping 88% in Q2 and stood at 4.21 mn t contrasted against 2.24 mn t a quarter ago. In similar lines, in H1 FY ’21 the volumes grew marginally by 1% to 6.44 mn t as compared to 6.40 mn t in CPLY.
5.SAIL’s finished-steel inventories decline to 1.1 mnt in end-Sept ’20- Indian govt owned – Steel Authority of India Limited (SAIL) has reported a finished steel inventory of 1.1 mnt by end-Sept’20.Inventories have come down as against 1.23 mn t as on 31 Aug’20 and 1.7 mn t on 31 Mar ’20.
6.Company’s share of exports widened in Q2 FY’21 – In a recent investor conference call, company officials mentioned that, exports sales accounted for 16% in Q2 FY’21 which was around 7% in Q2 FY’20. SAIL exported about 1.21 mn t during H1 FY’21 as against 0.488 mn t a growth of about 148%.
7.Reports positive EBIDTA in Q2- In Q2 FY ’21 the company reported positive EBIDTA at INR 2,098 Cr while in the preceding quarter the same was at loss of INR 125 Cr.
8.Coking coal prices – The company’s management highlighted that coking coal prices have come down sharply and company will start receiving its benefits from Q4 FY’21. In Q3 FY’21, average coking coal prices are likely to remain at similar levels as they were in Q2.
9.Sold around 1.1 mnt iron ore fines so far through auctions – Company’s management highlighted that they have sold around 1.1 mn t iron ore fines through auction so far in the fiscal. However they haven’t received clearances for auctioning sub-grade ore in Bolani mines (Odisha) which has sub-grade stock of around 7 mn t. They are hopeful of getting the clearances soon and start auctioning sub-grade ore. The company earned around INR 100 Cr from it .
10.Operational performance – The focus on operational efficiency also resulted in improvement in the key Techno-economic parameters during Q2 FY’21 viz. Coke Rate (4%). Blast Furnace Productivity’ (9%) and Specific Energy consumption (1%) over CPLY.
11.India’s long steel prices to pick up post Diwali – Company’s management is of the view that domestic long steel prices may pick up after Diwali with expected ramp up in construction & infrastructure activities.
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