SAIL, on Monday, reported a sharp fall of 18 per cent in net profit to Rs.696.41 crore during the April-June quarter, largely due to huge foreign exchange losses.

The company had posted a net profit of Rs.848.34 crore in the corresponding quarter of the last fiscal.

“There is adverse foreign exchange fluctuation, which leads to a hit of Rs.245 crore in the first quarter. The dollar-rupee exchange rate, which was 44.70 in June, 2011, stands at 55.63 in the current quarter. This impacts our profit,” company Chairman C. S. Verma told reporters here.

He added that the company had not fully hedged its exposure in dollars against rupee fluctuations.

A decline of over 40 per cent in other income segment at Rs.278.45 crore during the quarter also impacted the company’s profit. The steel producer had reported Rs.466 crore as other income in the same period in the previous fiscal.

Besides, company’s gross sales were almost flat at Rs.11,912.42 crore during the quarter against Rs.11,907.43 crore in the corresponding period of 2011-12.

For the current financial year, SAIL had kept a capital expenditure of Rs.12,000 crore on its expansion and regular activities, Mr. Verma said, adding that 50 per cent of this will be raised through debt.

Besides, the company is planning to spend about Rs.4,500 crore on development of Rowghat iron ore mines in Chhattisgarh, where the Home Ministry last month approved deployment of four battalions of paramilitary forces in the wake of Maoist threats. “Now the requirement of security forces have been met ... we will be making about Rs.4,000-4,500-crore investment… mining plan is under finalisation,” Mr. Verma said.

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