Lower net sales realisation pulls SAIL Q4 net down 71 per cent to Rs 447 cr

Hit mainly by a whopping Rs 1,347 crore dip in net sales realisation, Steel Authority of India's (SAIL) bottomline plunged 71.68 per cent to Rs 446.53 crore in January-March quarter from Rs 1,576.98 crore a year ago.

The net sales realisation of the company, which during 2012-13 sold 11.1 million tonnes, down by 2.5 per cent over the previous financial year, declined by 10.92 per cent in the fourth quarter to Rs 34,481 per tonne from Rs 38,717/tonne in the corresponding period of previous year.

It was down by 2.19 per cent for the year 2012-13 as a whole to Rs 36,389 per tonne from Rs 37,202 a tonne.

"Net profit is lower because of four reasons. The first is lower net sales realisation. We had to take a dip of Rs 877 crore only on account of lower net sales realisation for the full year and Rs 1,347 crore for the Q4 alone," SAIL Chairman C S Verma said.

Verma attributed the dip to subdued market conditions which had its bearing on the prices.

"During the year 2012, growth in global steel production increased by just 1.2 per cent and capacity utilisation was only 80 per cent. Domestically also, growth in crude steel production during 2012-13 was 2.1 per cent and consumption by 3.3 per cent to 73.5 million tonnes. This reflects the situation," he said.

Net profit could have been better but for higher provisioning for wages and tax. An expectedly better returns on 70 lakh tonnes of sales to Indian Railways than what has been provisioned for could also have bettered the bottomline.

SAIL, the largest domestic steel producer, did not publish consolidated results for the January-March quarter.

Total income of the company during the quarter was down 11.20 per cent at Rs 12,330.42 crore vis-a-vis Rs 13,885.29 crore during Q4 of FY12.

Moreover, its expenditure, at Rs 11,600.18 crore amounted to 93.71 per cent of its total income in the last quarter. The expenditure was nearly 88 per cent of its total income during the same period last fiscal.

Interest cost of the company also rose over 77 per cent at Rs 214.59 crore during the quarter, though its tax outgo declined over 59 per cent to Rs 294.58 crore.

For the year ended March, 2013, SAIL's standalone net profit was down 38.74 per cent to Rs 2,170.35 crore, while its total income declined 7.73 per cent to Rs 44,598.28 crore.