Standalone Fourth Quarter Review- For the fourth quarter ended Mar'11, the total income of the company reported at Rs. 12166.43 crore that dipped marginally by 0.5 % as against Rs. 12229.76 crore in the corresponding quarter last year. The decrease in stock in trade and WIP (work in progress) stood at Rs. 28.04 crore, declining 96.83% (Rs. 884.41 crore).
Riding on high raw material cost of Rs. 5389.34 crore, up 26.13% (Rs. 4272.68 crore), the company also had to deal with increased Employee expenses, rising 25.26% to Rs. 2,051.82 crore. Stiff coal prices were primarily responsible for the surge in raw material cost.
The average coking price almost doubled from US$128 a tonne in 2009-10 to US$212 per tonne during the year. SAIL imports more than two third of its coking coal requirements. The domestic coal prices also shot up to Rs 7500 per tonne as against Rs 6400 crore in the previous year.
Thus, the operating profit declined by 24.43% to Rs. 2340.36 crore (Rs. 3097.06 crore). Other financial expenses also showed an uptrend with Interest charges rising by 29.58% to Rs. 174.56 crore and Depreciation creeping up by 13.94% to Rs. 385.61 crore.
However, tax reduced by 30.6% to Rs. 680.5 crore. After adjusting all the financial expenses, the net profit reported at Rs. 1507.12 crore sliding by 27.71% from Rs. 2084.9 crore in corresponding quarter last financial year.
Fiscal year review- For the fiscal year ended Mar'11, the total income of the company increased marginally by 5.1% to Rs. 43418.76 crore from Rs. 41307.2 crore in the corresponding period last year. The increase in stock in trade and WIP (work in progress) stood at Rs. 1328.03 crore, rising a whopping 214.39% from decrease in WIP worth Rs. 1161.01crore in FY"10.
Riding on high raw material cost of Rs. 20233.22 crore, up 26.18% (Rs. 16034.57 crore), the company also had to deal with increased Employee expenses, rising 40.81% to Rs. 7627.37 crore. Thus, the operating profit declined by 22.84% to Rs. 7673.69 crore (Rs. 9945.23 crore).
Other financial expenses also showed an uptrend with Interest charges rising by 17.53% to Rs. 472.48 crore and Depreciation creeping up by 11% to Rs. 1484.27 crore. However, tax reduced by 32.62% to Rs. 2275.82 crore.
After adjusting all the financial expenses, the net profit reported at Rs. 4881.25 crore sliding by 27.73% from Rs. 6754.37 crore in corresponding period last financial year.
The SAIL board did not recommend any final dividend as the Government audit of company's accounts was still under way.
Proposed Capital Expenditure- According to Mr. C.S. Verma, Chairman, SAIL, the firm plans to spend Rs. 14,337 crore towards capital expenditure in 2011-12 as against Rs. 11,280 crore spent during the year. Part of the capex about Rs 3,500-Rs 4,000 crore will be met from the proceeds of the proposed follow-on public offer (FPO) likely to happen during the last week of May or early June.
The Government, which owns 85.82%, expects to dilute 5% stake in the company, while a fresh equity of 5% would be issued by the company. Further, SAIL expects to finalize 50:50 joint venture with Kobe Steel to produce iron ore nuggets in about two months time. The company also expects to soon finalize the detailed project report for its joint venture with South Korean steel maker Posco.