SAIL July-September earnings down 17.3 per cent at Rs1,663 crore

The Steel Authority of India (SAIL), the country's top steelmaker, saw its profit after tax (PAT) fall 17.3 per cent to Rs1,663 crore in fiscal second quarter (July-September 2009-10) compared with the PAT of the same quarter of the previous fiscal.

On a sequential basis, profit after tax for the September 2009 quarter, however, was up 25 per cent from the previous quarter (April-June 2009-10), unaudited financial results released by the company today showed.

Performance in Q2 of the current financial year improved over the previous quarter (Q1 FY'10) with cost cutting initiatives contributing nearly Rs700 crore, resulting in best-ever Q2 sales and special steel production, substantial additional realisation from sales of secondary products and all-round cost efficiency, an official release said.

The adverse impact due to lower price realisations in Q2 of FY'10 over the comparable quarter of the previous year was of the order of Rs3,000 crore. This could be partially offset through several internal actions which resulted in 14 per cent increase in sales volume, 15 per cent increase in value-added steel production, best-ever key techno-economic parameters, viz, coke rate, total energy consumption, blast furnace productivity and prudential financial management.

Together with this, substantial reduction in operating costs, repair and maintenance, stores and spares, administrative expenses etc resulted in overall savings of over Rs1,000 crore in Q2.

The company's capital expenditure of Rs2,450 crore in Q2 has been more than double compared to that in the previous year quarter. During the first half of the current fiscal, total capital expenditure of the company touched Rs4,920 crore - 2.5 times that of H1 FY '09.