SAIL net profit slips 18% in Q1

State-owned steel producer SAIL on Monday reported a sharp fall of 18 per cent in net profit to Rs 696.41 crore during the April-June quarter, largely due to huge foreign exchange losses.

The company had posted a net profit of Rs 848.34 crore in the corresponding quarter of the last fiscal.

"There was adverse foreign exchange fluctuation, which led to a hit of Rs 245 crore in the first quarter. The dollar rupee exchange rate, which was 44.70 in June, 2011, stood at 55.63 in the current quarter. This impacted our profit," company Chairman C S Verma said.

He added that the company has not fully hedged its exposure in dollars against rupee fluctuations.

A decline of over 40 per cent in other income segment at Rs 278.45 crore during the quarter also impacted Steel Authority of India's (SAIL) profit. The steel producer had reported Rs 466 crore as other income in the April-June period of the last fiscal.

Besides, company's gross sales was almost flat at Rs 11,912.42 crore during the quarter against Rs 11,907.43 crore in the corresponding period of FY12.

For the current financial year, SAIL has kept a capex of Rs 12,000 crore on its expansion and regular activities, Verma said, adding that 50 per cent of this will be raised through debt.