Press Information Bureau

Government of India

Ministry of Steel

14-May-2012 14:18 IST

The Minister of Steel, Shri Beni Prasad Verma has said that the details of Profit After Tax (PAT) of the Steel Authority of India Limited (SAIL) during 2008-09 to 2010-11 and third quarter of financial year 2011-12 are as under: -

(Rs. in crore)

 In a written reply in the Lok Sabha today Shri Verma said, in financial year 2010-11, as compared to financial year 2009-10, the profitability declined mainly due to adverse impact of input prices, particularly imported coal, salary & wages, higher interest & depreciation and reduction in interest earnings and increase in royalty on minerals etc.

He said, in third quarter of 2011-12, the profitability declined mainly due to lower production, sales volume of saleable steel, adverse impact of input prices, and increase in royalty on iron ore, higher interest & depreciation and adverse foreign exchange variation. The adverse impact has been partially offset by higher net sales realization of saleable steel.

Shri Verma said, in order to improve its profits, the steps taken by SAIL include improvement in production by targeting higher proportion of crude steel through energy efficient continuous casting route, increasing share of value added products in product mix, improving coal dust injection rate in blast furnaces, improving health of major units/steel making equipment etc. Other measures to improve overall profitability include improving techno-economic parameters, particularly coke rate and specific energy consumption, increasing sales of by-products, scrap, sale of idle assets and non-moving/obsolete stores and spares, curtailing expenditure on traveling and other administrative expenses etc.

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NSK/DB

Profitability decline prompts operational and cost-control measures to restore steel producer's margins amid input-cost pressures. Profitability fell markedly between 2009-10 and 2010-11 and remained weak into 2011-12 due to higher input costs (notably imported coal), raised salary and wage bills, increased interest and depreciation, reduced interest earnings, higher mineral royalty, lower production and sales volumes, and adverse foreign exchange variation; higher net sales realisation only partially offset the decline. To improve profits the company is pursuing production and product mix optimisation, energy and process efficiencies, higher coal injection rates, asset disposals, increased by product and scrap sales, and tighter administrative cost control.