11 Aug 2022
Steel Authority of India Ltd sold over 1.4 mln tn of steel in July and expects the current month to record the highest sales volume for August of any year, its management told analysts and investors in a conference call today.
The steel public sector unit reported a weak set of earnings numbers for the June quarter on the back of 5.4% decline in sales volume to 3.2 mln tn from the year ago period.
It was in this context that the company addressed concerns on volume growth front. The company said it was confident of volume recovering in the remainder of the current financial year on the back of a bounce back in domestic steel consumption.
The company's net profit for the June quarter fell 80% on year to 7.8 bln rupees. But its sales went up by 16% to 249.3 bln rupees on the back of improved sales realisation.
The company disclosed in today's analyst call that the net sales realisation in the June quarter was 66,829 rupees per tn as compared to 59,495 rupees in the March quarter.
Since coal costs went on a decline for the company in the current quarter till date the sales realisations in July had fallen.
The company said its imported coking coal costs were down in July to 38,000 rupees per tn from 39,500 rupees per tn in Apr-Jun. It expected the cost to come down further by 4,000-5,000 rupees per tn in the current month and further from September onwards.
The imported coal consumption in the June quarter was around 85% of total coal consumption. Indigenous coal made up for the rest and its costs were much lower at 13,000 rupees per tn in the June quarter.
SAIL's cost of materials consumed jumped 2.8 times to 176.8 bln rupees in Apr-Jun. This affected its operating performance.
The operating profit, defined as earnings before interest, tax, depreciation and amortisation, dived 61% on year to 26.1 bln rupees in the June quarter and its operating margin contracted substantially to 10.9% from 32.3% in the year ago period.
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