NEW DELHI: Hit hard by higher raw material costs, Steel Authority of India (SAIL) on Friday reported a 29 per cent dip in net profit to Rs 838 crore for the first quarter of the current fiscal despite nearly 20 per cent jump in sales.
The state-run firm had posted net profit of Rs 1,177 crore in the same quarter last fiscal, a company release said.
"During Q1, SAIL had to bear an additional expenditure of nearly Rs 580 crore on cost of coal alone. Of this, around Rs 422 crore was on account of higher cost of imported coking coal, with prices rising from USD 200 per tonne in Q1 last year to $330 in Q1 of FY'12," SAIL said.
The company consumed raw material worth Rs 5,229 crore during the reporting quarter as compared to Rs 4,702 crore in the same quarter last fiscal.
However, SAIL said the impact of higher cost was partially mitigated by better product-mix, higher sales and savings achieved through management initiatives.
Production of crude steel rose by five per cent at 2.35 million tonnes during the quarter.
Buoyed by higher production, the net sales of the company increased to Rs 11,891 crore against Rs 9,931 crore in the same quarter last fiscal.
"Operating at 110 per cent of rated capacity, SAIL plants maintained production of saleable steel at the same level of 3.044 million tonnes as achieved in Q1 FY'11 despite shutdown of two blast furnaces for capital repairs in the April-June quarter of the current fiscal," SAIL said.
Sail q1 net down 20% to rs 838 crore despite rise in sales
CA ADITYA SHARMA (CA IN PRACTICE ) (16719 Points)
29 July 2011
CAclubindia
