Drop in imported coal price helps
Steel Authority of India Limited’s (SAILs) net profit more than doubled to Rs.1,180 crore in the July-September quarter from Rs.543 crore in the year-ago period.
“One of the reasons for increase in our profit was lesser prices of coal. The price of imported coal, which was $220 a tonne during the second quarter of the last fiscal, has come down to $135 a tonne. So, there was a savings of Rs.885 crore to the company on this account,’’ SAIL chairman C. S. Verma told reporters here. During the second quarter, SAIL got exceptional amount of Rs.1,056 crore from global mining major Vale towards damages due to non-supply of full quantity of contracted hard coking coal. However, this did not truly reflect on the profitability of the company as it had to make a provision, which stands at Rs.1,150 crore now, for an impending wage hike of its close to 85,000 non-executives.
SAIL largely met its 15-16 million tonne coking coal requirement through imports, mostly from the U.S. and Australia. There was a dip in realisation to the tune of Rs.720 crore during the second quarter, compared to the year-ago period.
Mr. Verma said sales realisation during the second quarter of the last financial year was Rs.37,210 a tonne. During this quarter, this came down to Rs.34,230 per tonne. The turnover was up by 7 per cent at Rs.12,802 crore.