The Hindu : Business : SAIL net zooms

Online edition of India's National Newspaper
Thursday, May 26, 2005

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Business

SAIL net zooms

Special Correspondent

To pay 18 p.c. final, draws up Rs. 25,000 cr. investment plan

NEW DELHI: In an unprecedented profit-earning story since inception, the Steel Authority of India Ltd. (SAIL) on Wednesday announced a steep rise of 171 per cent in its net profit to Rs. 6,817 crore in 2004-05 from Rs. 2,512 crore in the previous fiscal.

Briefing newspersons at a conference here, the SAIL Chairman, V. S. Jain, said for the public sector steel major, enabling this "record breaking" audited financial performance during the fiscal was its best-ever fourth quarter ended March 2005 in which the net profit zoomed 164 per cent to Rs. 2,678 crore from Rs. 1,014.28-crore profit earned in the same period in the previous year.

Enthused by the record performance, the SAIL board has recommended a total dividend pay-out of 33 per cent for the year. In effect, it works out to a final dividend of 18 per cent for 2004-05, in addition to the 15 per cent interim declared in January this year. "The outgo towards payment of dividend (final) will be Rs. 743 crores, of which the Government would get Rs. 638 crore," he said.

The turnover during the year rose by 32 per cent to Rs. 31,800 crore while total income increased by 32.84 per cent to Rs. 29,401.64 crore from Rs. 22,132.93 crore in 2003-04.

Driving the turnaround story home, Mr. Jain said: "SAIL's outstanding financial performance during the year has made it among the topmost profitable companies in the country from being among the largest loss makers just a couple of years ago."

As for the other performance parameters, the company produced 11 million tonnes of salable steel during 2004-05 and achieved an all-time high sales of 10.7 million tonnes. Of this, while 10.3 million tonnes was sold in the domestic market, exports accounted for the balance 4.6 lakh tonnes. It proposes to increase production by about seven-to-eight per cent in the current fiscal so as to meet the domestic demand for the commodity in full.

The steel giant had also drawn up medium-term investment plans envisaging a capital outgo of about Rs. 25,000 crore to raise its hot metal capacity to 20 million tonnes by 2011-12 from 12.5 million tonnes, he said.

The planned investment, Mr. Jain said, would be largely met through internal accruals without the likelihood of going in for short-term borrowings. This apart, investment schemes of about Rs. 3,000 crores were also at various stages of implementation at its plants in Bhilai, Durgapur and Rourkela.

During the current year, investment programmes for a similar amount were to be taken up for evaluation and approval for implementation in some of the other plants, Mr. Jain said.

Virtually a zero debt co.

As for its past losses and liabilities, Mr. Jain said SAIL had become "virtually a zero-debt company", reducing its market borrowing by Rs. 2,920 crore during 2004-05 to Rs. 5,770 crore. It has not acquired any fresh loans in the last couple of years while the interest outgo was lower by Rs. 296 crore during the last fiscal.

Asked whether SAIL was planning to acquire mines abroad, he said several proposals were being looked at and no final decision was taken as yet. "We are pursuing several proposals but it would depend on the cost of mine, whether it meets our requirements and various other parameters," he said.

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