SAILing through troubled waters: Steel major’s Q3 net loss narrows to Rs 795 cr

SAIL CMD PK Singh 

STATE-run Maharatna PSU Steel Authority of India's net loss for the quarter ended December 31, 2016 narrowed to Rs 795 crore as higher production resulted in greater sales during the period. The PSU posted a net loss of Rs 1,481.06 crore in the same quarter of the last financial year (2015-16). The total expenses of the PSU increased to Rs 13,332.3 crore from Rs 11,758.8 crore in the same period, last fiscal. "With improvement in the share of value added products...
like high tensile plates, long rails, CR coils and structurals in our product basket and intensifying our marketing approach we aim to improve our market share," PK Singh, CMD, SAIL said. The PSU claimed that there was rise in operating profit despite higher global coking coal prices during the quarter impacting the margins sharply.
The growth in production and sales is driven by an all-round improvement strategy of the top management by strengthening the entire value chain, the CMD said.
The steelmaker’s  year-on-year employee benefit expenses remained nearly flat at Rs 2343.27 crore as compared with Rs 2399.73 crore.
On quarterly basis the company's net loss increased nearly 9 percent from Rs 731.58 crore in July-September quarter.
Rating agency ICRA in its report said, imposition of anti-dumping duty, along with safeguard duty and minimum import price (MIP) have resulted in a 37 percent year-on-year de-growth in India's steel imports during April-December (2016-17), after rising steeply by 26 percent in 2015-16.
The decline in steel imports has coincided with a strong growth in steel exports by domestic mills, supported by an improvement in the pricing scenario in international markets, it has helped bridge the gap between India's steel imports and exports to just 0.52 million tonne during April-December of 2016-17 as against a much wider 7.64 million tonne during 2015-16.
The country's largest steel maker is also planning to spend up to Rs 4,000 crore on the modernisation and expansion of its plants in the coming fiscal.
"The Capex for the ongoing fiscal is nearly Rs 4,000 crore (2016-17). Next fiscal it should be similar range, somewhere between Rs 3,000 to Rs 4,000 crore," Singh earlier told PTI.
The company would fund the capital expenditure through debt, he said.
 "We will invest the amount throughout our plants. We are a big company and continuously we have to invest otherwise technology goes obsolete, processes go obsolete. There is a need of investment ... We need to invest to improve our processes," he said.
In 2015-16, the public sector undertaking (PSU) had spent Rs 4,483 crore as capital expenditure.
 Crude steel production of SAIL, which was at 14.3 million tonnes (MT) in FY16, would increase to 21.4 MTPA post expansion in FY17.
The PSU's saleable steel production, which was at 12.4 MT in 2015-16, would augment to 20.2 MTPA post expansion in 2016-17. The hot metal production, which stood at 15.7 MT in FY16, would reach 23.5 MT post expansion. SAIL also plans to ramp up capacity further to 50 million tonnes per annum (MTPA) by 2025. The proposed capacity expansion to 50 mtpa is in line with government's vision of enhancing India's steel-making capacity to 300 mtpa by 2025.