India’s largest steelmaker SAIL today said its standalone net loss widened to Rs 534.92 crore in the June quarter this fiscal on account of a dip in sales realisation and higher interest and depreciation charges.
The state-run firm had posted a net loss of Rs 248.24 crore in the year-ago period, it said in a BSE filing. Total standalone income of the Maharatna firm declined by 3 per cent to Rs 9,238.08 crore in April-June this fiscal from Rs 9,493.11 crore during the same quarter in 2015-16.
However on the brighter side, despite a 5 per cent fall in net sales realisation, SAIL posted a positive EBIDTA after three quarters with a growth of 9.3 per cent.
That apart, the company registered its highest ever June quarter saleable steel production of 3.44 million tonnes (MT), which is 11 per cent higher that the same quarter in 2015-16. SAIL also managed to reduce its expenses to Rs 9,604.52 crore from Rs 9,856.23 crore during the period under review.
Due to cost reduction measures, ramping up production from new mills as well as rationalising the production from inefficient routes, SAIL achieved a 10 per cent reduction in its variable cost in April-June compared to a year-ago.
On higher net loss, the company said: “The loss after tax for Q1 2016-17 was Rs 536 crore against a loss of Rs 248 crore in year-ago in spite of higher EBIDTA primarily due to higher interest and depreciation charges on account of capitalisation of new assets.”
SAIL Chairman P K Singh said in present market conditions the company is following a strategy of concentrating on customer, competition and change to attain its targets.
Sounding positive on the road ahead, he said: “We believe that on the back of a strong monsoon and government’s plans to invest massively in infrastructure such as roads, railways, highways, ports would result in increased steel demand in the second half of the current financial year.”
The firm witnessed a 4 per cent growth in overall sales for Q1 2016-17 over last year mainly contributed by long products which witnessed an 8 per cent growth.
During Q1 2016-17, SAIL spent more than 25 per cent of its total planned capital expenditure for this financial year.
“All major facilities under Modernisation and Expansion Plan of the company’s steel plants at Rourkela, IISCO, Durgapur, Bokaro and Salem have been completed and are under operation/stabilisation,” it said.
Hot trials in Bhilai’s upcoming Universal Rail Mill have commenced and the balance modernisation of Bhilai Steel Plant would be completed in the next few months, which would improve SAIL’s production capacity to around 20 MT of saleable steel, it added.