SAIL has reported an 18 per cent drop in net profit for the June quarter at Rs 696.41 crore on higher foreign exchange losses. Net sales for the quarter were down 1.5 per cent at Rs 10,777.60 crore on sluggish off-take.
SAIL Chairman C.S. Verma attributed the decline in net profit to the Rs 257-crore foreign exchange losses incurred during the quarter. The forex losses rose to Rs 256.94 crore against Rs 11.66 crore in the corresponding last quarter as the company had not fully hedged its exposure.
“The forex losses were on expected lines as the company has huge foreign debts,” said Bhavesh Chauhan, analyst at Angel Broking Ltd. SAIL had a total debt of Rs 20,000 crore as of June-end.
However, the 8.5 per cent rise in net realisations during the quarter helped offset higher input costs and forex losses. Tracking the earnings announcement, the SAIL scrip pared the intra-day gains to end Rs 85.30, up 0.65 per cent over previous close.
Capex plan
SAIL, Verma said, incurred a capital expenditure of Rs 2,000 crore during the quarter. For the 12{+t}{+h} Plan, the company has charted a capex plan of Rs 45,000 crore, of which Rs 12,000 crore would be invested in the current fiscal. About half of the investments planned for the year, would be met through borrowings, Verma said, stating that the company ended the quarter with a cash reserve of Rs 6,000 crore.
Production of hot metal during the quarter was 3.02 million tonnes, marginally down from 3.04 mt in the corresponding last quarter. Sales volumes were about 2.5 mt, down from 2.75 mt in corresponding last year, resulting in a marginal rise in inventory. “The inventories are well within the prescribed norms,” SAIL chairman said, stating that he expects the prices to remain stable at current levels for the quarter ahead.
Final pact on Afghan mines soon
SAIL-led consortium consisting of both public and private sector players that has won the bids to develop Hajigak iron ore deposits would sign the pact with the Afghanistan Government soon. In the first phase, the consortium will invest $75 million, Verma said.