Steel Authority of India Ltd (SAIL) has reported an 18 per cent jump in its net profit for the first quarter of fiscal 2014-15 on the back of better net sales realisations for every tonne of the metal sold. The net profit during the quarter was ₹530 crore against ₹451 crore in the same quarter last year.
During the quarter, the company’s net sales grew 11 per cent over the same quarter last year to ₹11,341 crore from ₹10,223 crore in the same quarter last year.
“The company’s net sales realisations improved around 5 per cent on an average during the quarter. On an average, the net sales realisations were ₹36,858 per tonne while last year it was ₹35,077 per tonne,” said the company’s Chairman and Managing Director, CS Verma.
Verma added that with the completion of modernisation and expansion projects at Rourkela and Burnpur steel plant, the company expects to end the fiscal with 19.5 million tonnes per annum steel capacity against the current 17.5 million tonnes per annum currently. The expansion would give SAIL the largest steel making capacity in the country.
While the company is expected to import 17 million tonnes of coal annually, after the new capacities start operating at optimal levels, Verma was optimistic about getting coal from the Mozambique mines acquired by a SAIL-led joint venture, International Coal Ventures Ltd.
"Tata Steel has 40 per cent run on mines in the Benga mine in Mozambique, which is a production asset giving 5 million tonnes per annum. But we can access the rest of coal mined from Benga,” said Verma.
“The three mines in Mozambique have 2.6 billion tonnes of reserves. The rail and port infrastructure is also getting augmented as we take steps to increase production there. Shipping freight from Mozambique will be cheaper than US and Australia at around $12-13 and the first shipment is expected in December 2014,” he added.
SAIL imports between 10-12 million tonnes of coal annually with 2/3rd of this coming from Australia and the remaining from US.
On Monday, SAIL’s shares closed 2.03 per cent higher on the BSE at ₹83.