Steel Authority of India Ltd (SAIL), achieved a turnover of INR 12,860 crore in the first quarter of FY18, registering a growth of 26 per cent over the turnover of INR 10,180 Crore achieved in the corresponding period of last year.
In the same quarter, the total sales volume at 3.028 MnT recorded 9% growth over the previous fiscal. The company’s sales of finished steel (without semis) were also higher by 4.12 lakh tonnes during Q1 of FY18 as compared to Q1 of FY17, recording a 19 % growth.
With the SAIL management’s intensive focus on ramping up of new mills and enriched product mix from the new facilities, SAIL continued to remain EBITDA (earnings before interest, taxes, depreciation and amortisation) positive with INR 23 crore EBITDA in Q1 of FY18.
In Q1 of FY18, SAIL bore an impact of 115% higher price on account of imported coal and 25% higher price on account of indigenous coal over the comparable period of last financial year, pushing down the overall profitability margin despite a 14 % higher Net Sales Realizations (NSR) over the same quarter last year.
Due to these factors, the steel PSU posted a loss of INR 801 crore in the April-June quarter. During the quarter, due to Cyclone Debbie, the supplies of coking coal from Australia were adversely impacted, resulting in lower production volumes of saleable steel. However, the techno-economic parameters showed improvements with respect to Coal Dust Injection (CDI), coke rate, blast furnace productivity and production through the more efficient continuous casting route.
Owing to improving market sentiments, the company is rapidly ramping up its new mills towards the rated capacities. SAIL management is also focusing on rigorous marketing initiatives so as to increase its market share for the company’s new and enriched product basket including universal structural, rails, wire rods, plates etc.
The company has launched a nationwide campaign, with primary focus on rural areas, to create awareness about advantages of using steel, among various groups of stakeholders including masons and construction workers. In addition, the company is also focusing on sales to rural segment and ready to use materials.
SAIL is making effort for cost optimization. Manpower optimization initiatives are being implemented in right earnest for effective utilization of human resources, improved productivity, cost reduction and improved age-mix.
SAIL chairman P K Singh said that, “We are maintaining positive EBITDA inspite of the challenging situation in the steel sector, and that shows the collective resolve of the Company. With the imported coal availability stabilizing and focus on ramping up the new units, the situation will improve in coming quarters.We have drastically reduced production from inefficient units and are optimizing the coal blend in operations to reduce costs. These steps will surely translate into improved financials going forward.”
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