SAIL net up 199%

New Delhi, Oct 29 | Updated: Oct 30 2004, 06:05am hrs
Steel Authority of India (SAIL) has recorded a 199% increase in net profit to Rs 1,513.15 crore in the second quarter ended September 30 compared to Rs 505.16 crore in the corresponding period previous year.

The company leveraged its strengths of a varied product basket and flexibility in production by changing its product mix to maximise earnings. It is considering an interim dividend after a gap of seven years.

SAILs topline posted a 32% growth at Rs 6,789.42 crore in the second quarter in 2004-05 against Rs 5,116.25 crore in the same period last year.

Commenting on the financial results, Sail chairman VS Jain said: We may consider dividend at an appropriate time.

Speaking about the companys strategy on raw material sourcing, Mr Jain said Sail has signed an agreement with Australian mining giant BHP Billiton to meet the shortage of coking coal.

The company is planning to pick up equity if the MoU translates into a joint venture, after the due diligence process gets over.

For the first half ended September 30, net profit of the company jumped by 245% at Rs 2,624.74 crore over Rs 759.85 crore in the same period last year. In the first year itself, the companys net profit has crossed the net profit of last fiscal. In the last financial year, Sail had posted a profit of Rs 2,512 crore.

The company has major investment plans to spur growth of both topline and bottomline.

Coal supply situation, which was a major constraint since the beginning of the current financial year, stabilised towards the end of H1. This was reflected in the overall improvement in most of the production parameters during Q2 compared to the Q1 performance.

We are comfortable today but certainly not complacent about the companys future. We have planned a massive expansion plan envisaging an investment of over Rs 25,000 crore, Mr Jain said.

Most of the investment would be funded through internal accruals, he added.

The company has been able to manage its debt equity ration at 1:1. The company has reduced its debt by around Rs 1,783 crore during the first six months of the current fiscal. The debt of the company came down to Rs 6,906 crore as on September 30, 2004 compared to Rs 8,689 crore on March 31, 2004.