SAIL Q4 net drops 59 per cent on lower realisations and higher input costs
By Our Corporate Bureau | 25 Jun 2005
Fourth
quarter and full year 2005-06 results from SAIL clearly
bear the impact of subdued steel prices and rising input
costs. After the superlative performance of 2004-05, most
steel companies have reported weak numbers for 2005-06.
For the quarter ended 31 March 2006, net profits declined substantially by 58.81 per cent to Rs1,103.2 crore from Rs2,677.99 crore for the previous year quarter. Total revenues declined marginally to Rs9,378.92 crore from Rs9,451.92 crore.
Net sales declined 1.6 per cent even as volume sales increased on lower realisations during the quarter. Operating profits declined 61.97 per cent as compared to the previous year quarter. Operating margins as a percentage of net sales were at 16.44 per cent as compared to 42.54 per cent during the previous year quarter.
Apart from lower price realisation, a substantial increase in input costs by 64.54 per cent also affected operating margins. Other manufacturing costs increased 16.16 per cent during the quarter.
Increase in staff costs was at 14.69 per cent while other expenses rose 32.5 per cent. Interest costs were lower by 27.62 per cent while depreciation charges increased by 7.14 per cent.
For the full year 2005-06, standalone net profits declined 41.13 per cent to Rs4,012.97 crore, or Rs9.72 per share from Rs6,816.97 crore, or Rs16.5 per share, during the previous year. Standalone revenues for the full year declined marginally to Rs29,311.99 crore from Rs29,401.64 crore for the previous year.
Full year operating profits declined 36.66 per cent to Rs6,847.41 crore from Rs10,810.12 crore during the previous year. Operating margins as a percentage of net sales declined substantially to 23.79 per cent from 37.13 per cent.
Interest costs for the year declined 22.69 per cent as the company brought down outstanding debt to just over Rs4,000 crore. Depreciation charges increased modestly by 7.13 per cent.
Other income increased 85.7 per cent to Rs533.39 crore from Rs287.23 crore during the previous year.
Consolidated profits for the full year 2005-06 declined 41.1 per cent to Rs4,061.01 crore from Rs6,894.22 crore during the previous year. Consolidated revenues were lower by 5.68 per cent at Rs29,599.08 crore as compared to Rs31,382.85 crore.
Indian Iron and Steel Company (IISCO) was merged with SAIL with effect from 01 April 2005. Consolidated results for the year include the performance of IISCO as well.