SAIL Q2 profit plummets 55 per cent on rising costs, forex losses

Steel Authority of India (SAIL), the largest steel producer in the country, has reported a 55 per cent drop in its quarterly profits for the fiscal second quarter ended 30 September 2011.

State-run SAIL reported an after-tax profit of Rs494.64 crore and profit before tax of Rs714.89 crore for the July-September 2011-12 quarter - both around 55 per cent lower compared to levels in the previous year quarter.

Quarterly results of the company showed a mere 2 per cent year-on-year growth in SAIL's sales turnover at Rs11,970.35 crore for the July-September quarter of the current financial year (2011-12).

SAIL, which blamed the halving of quarterly profit on rising input prices, foreign exchange variation, royalty on iron ore, etc, however, maintained that demand would rise during the rest of the fiscal year.

SAIL also suffered a foreign exchange loss of Rs509 crore on account of some exceptional items during the quarter. PBT would have been almost at the same level as the previous quarter, if the impact on account of foreign exchange variation was only notional, SA*IL said in a release.

For the first half of the financial year (April-September 2011-12) SAIL recorded a sales turnover of Rs23,877.78 crore compared with Rs21,628 crore in the corresponding period of the previous financial year, an increase of 10.4 per cent year-on-year. Total sales during the first half rose 4.3 per cent to 5.6 million tonnes.