Steel Authority of India Ltd. (SAIL) on Wednesday posted robust results with its profit nearly doubling to Rs.1,675.55 crore for the October-December quarter on account of improved sales, cheaper input cost and low base.
“Our sales volume has gone up by about 24.5 per cent to 2.9 million tonnes in the third quarter of the current fiscal compared to that in the same quarter of the previous year. Our cost of imported coal was much lower in the quarter,” SAIL Chairman and Managing Director S. K. Roongta told reporters here.
The low base effect also contributed to almost 99 per cent increase in profit. The company had a net profit of Rs.843.34 crore during October-December 2008. However, Mr. Roongta said he anticipated a hike in steel prices due to pressure on input cost. “If the contracted rates for coal for the next financial year are higher, it will exert pressure on input cost and may lead to increase in prices,” he added.
SAIL also declared a dividend of Rs.1.60 per share for 2009-10.
The company pays over $100 a tonne this fiscal to companies from which it is importing coal.
In 2008-09, SAIL had bought coking coal at a contracted rate of about $300 a tonne. It is undertaking a massive Rs.70,000-crore expansion to take capacity to 23.2 million tonnes from 14 million tonnes now. The state-run company is planning Rs.12,000-13,000 crore capital expenditure in the next financial year.
Mr. Roongta said the company hoped to improve output and sales in the March quarter as demand from automobile and construction sectors was expected to pick up. “There is generally good demand. We expect to improve our production and sales during the current quarter. We have to reckon to the fact that overall global capacity utilisation is still at lower levels. Increased demand will be met out of increased supplies,” the Chairman added.