The Hindu : SAIL enters profit zone in Q4

Online edition of India's National Newspaper
Tuesday, Apr 08, 2003

Business

Business

SAIL enters profit zone in Q4

By Our Staff Correspondent

KOLKATA APRIL 7. The bad days are over. After five years the Steel Authority of India (SAIL) is back in the profit zone. While official sources only confirm that it "is in sight of a turnaround" in the last quarter of 2002-03, sources peg the profit figure for the quarter close to Rs. 450 crores. The improved performance has also led the company to register a cash profit of about Rs. 400 crores for the entire year, after a gap of three years.

Among the four integrated plants Bhilai ended up the fiscal with the highest profit of about Rs. 700 crores followed by over Rs. 200 crores by Bokaro. After almost three decades, Durgapur came back in black in the last quarter, leaving only Rourkela deep in the red. The latter, however, had cut down its losses substantially by over Rs. 450 crores from as high as Rs. 1034 crores.

SAIL was witnessing recovery from the beginning of 2002-03 and ended the first six months with a cash profit of Rs. 90 crores. The sharp rise in prices from the beginning of the second half made it even more confident and in September the company had hinted at the possibility of breaking-even in 2003-04. It registered a net profit of Rs. 133 crores in 1997-98.

Interestingly sources said the windfall gain in prices in the fourth quarter and the resulting profit would have effected a turnaround in the last fiscal, had an additional provisioning of about Rs. 490 crores on account of final retirement benefits, not come in the way. "But for this extra provisioning, we could have ended the fiscal with a loss of Rs. 100-150 crores," the sources said adding that as things stand now the loss would be in the region of Rs. 550 crores" almost at the level of the loss in the first nine months. SAIL posted Rs. 1707 crore loss during 2001-02. The loss in the first nine months of 2002-03 was Rs. 546 crores.

Meanwhile, the improved performance has rekindled the hopes of resumption of several employee welfare schemes and a host of other entitlements, which were withdrawn since 1999.

While there is little hope of the settlement of wage arrears for the period between January 1997 and January 2001 amounting to about Rs. 970 crores, sources hinted at the possibility of the resumption of leave travel allowances amounting to about Rs. 150 crores in a four-year `block'.

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