SAIL net profit falls by 60%

After depreciation of Rs 689.74 crore against Rs 584.81 crore and taxation represents minimum alternate tax of Rs 74.64 crore (nil), the net profit dropped to Rs 527.21 crore from Rs 1318.61 crore.

This is despite SAIL achieving the best-ever production of hot metal, crude steel and saleable steel during last year, SAIL chiarman Arvind Pande said the profit this year has been adversely affected by substantial increase in input prices amounting to about Rs 1,000 crore.

The pre-tax profit of the company was down by 54 % to Rs 601.85 crore compared to the previous year’s profit Rs 1318.61 crore. SAIL did not pay any tax in 1995-96 since it was a zero-tax company. However, with the introduction of MAT, SAIL had to pay Rs 74.64 crore in 1996-97 as tax.

The public sector’s interest payments have gone up to Rs 1179.39 crore in 1996-97 from Rs 808.37 crore during the previous year.

In view of the improvement in global demands the corporation has set an export target of 10 lakh tonnes of steel, Pande said, adding, that SAIL would fully exploit its “intrinsic strength” to tide over the present difficult situation.

Enumerating steps taken to cut costs, SAIL chief said a target of slashing production costs by 10 % was set for the current financial year, he added.Stating that the board had passed unaudited accounts, Pande said in a statement that it was the 11th consecutive year that the corporation had recorded profits and hoped that the recent policy changes, announced in the union budget, would provide impetus to the steel industry and its impact could be expected during the second half of current fiscal.

On its part, SAIL was also reducing coal consumption, which accounts for over 60 % of material costs, besides operating fewer blast furnaces at Bhilai and Bokaro plants to ensure optimum utilisation of resources, Mr Pande said adding use of petro-fuels would also be cut.

Despite these difficult conditions the corporation achieved a 28 % growth in sales of wire rods, 24 % in pipes and pig iron by 25 %, while exports from SAIL increased significantly by 28 %.

Stating that a special thrust was being given to the quality of products in order to maintain its competitive edge, Pande hoped that full beneifts of modernisation facilities at Durgapur and Rourkela steel plants would flow in during the current year.

He said that second half of the year would see improvements in the quality of hot rolled and cold rolled products from Bokaro plant, which is being upgraded.