Indian steel goliath Steel Authority of India Limited (SAIL) has recently issued its unaudited financial results covering the October-December period of 2010 or the third quarter (Q3) of the financial year 2010-11 (FY 2010-11), posting a record turnover but a decreased net profit due to rocketing raw material prices.
Reflecting the sharp increase in prices of raw materials, particularly imported metallurgical coal, SAIL reported a net profit of INR 11.07 billion ($244.32 million) for the quarter in question, marking a decrease of 33.9 percent over the corresponding period of last year. SAIL's sales turnover during Q3 FY 2010-11 was a record-high INR 122.76 billion ($2.71 billion), 17.5 percent higher year on year. SAIL said that the variation in profit was primarily caused by the increase in the coal input price.
SAIL recorded a net profit of INR 33.74 billion ($744.04 million) in the first nine months of the financial year in question, marking a decrease of 27.7 percent over the corresponding period of the last financial year, again due to increasing raw material prices. The company's sales turnover during Q1-Q3 FY 2010-11 was INR 339.05 billion ($7.48 billion), 9.6 percent higher year on year. SAIL said that the variation in profit in the nine-month period was also primarily caused by the increase in the coal input price.
SAIL sees increased production results
In volume terms, in Q3 FY 2010-11, SAIL's hot metal production was the highest-ever at 3.96 million mt - up 12 percent over the previous quarter and up four percent year on year, while crude steel production was 3.7 million mt, up 13 percent over the previous quarter and up four percent year on year. Saleable steel production at 3.33 million also grew by eight percent over the previous quarter and five percent over the same period of the last financial year. SAIL's sales at 3.25 million mt during the quarter were 10.7 percent higher than in Q3 of the previous financial year, with value-added sales accounting for 1.2 million mt, up 7.2 percent.
The Q3 FY 2010-11 operating performance helped SAIL to achieve production growth of two percent in hot metal at 11.14 million mt, one percent in crude steel at 10.24 million mt and one percent in saleable steel at 9.46 million mt in the first three quarters of FY 2010-11, as compared with the corresponding nine months of the last fiscal year.
Reviewing the fiscal quarter performance, SAIL chairman C.S. Verma said, "There has been an uptrend in sales and profit compared to the preceding quarter, despite a higher cost push. I am confident that our SAIL team will leave no stone unturned to face all challenges to maintain this improving trend."