Submitted by Rajvir Khanna on Wed, 01/28/2009 – 13:00. Company Results PSU Sector Steel Sector Featured TNM
Higher input costs and global slowdown adversely hit the business of state operated Steel Authority of India (SAIL) for the third quarter of current financial year.
The steel giant registered 56.4% decline in net profit for the quarter ended December 31, 2008 leading to a setback for its expansion plans amid recessionary waves across the world.
The sales of PSU major declined 5.9% to 8,852.3 crore during the quarter following low demand from reality and automobile sector. High input costs and lower sales realizations hit its business leading to decline in overall net profit. It spent Rs 5,880.5 crore for raw material in the third quarter as compared to Rs 3,250.8 crore in the same period last year.
The company said in a statement, “The bottomline was impacted primarily due to a sharp rise in input prices, especially imported and domestic coking coal, ferro-alloys etc. The adverse impact on account of higher prices of coking coal alone amounted to approximately Rs 2,641 crore.”
However, the company saved around Rs 275 crore during the quarter on accounts of its efficient management, cost cutting measures and reduction in coke rate by over 2 per cent and energy consumption by 4 per cent.
Meanwhile, SAIL has decided to declare an interim dividend of Rs 1.30 per share at the rate of 13% on shares of Rs 10 face value with immediate effect.